New Zealand King Salmon experienced a slight decline in revenues for the six-month period ending 31 December, 2019.
Its revenue dropped from NZD 87.7 million (USD 55.2 million, EUR 48.9 million) to NZD 84.2 million (USD 52.9 million, EUR 46.9 million). The company attributed the dip to lower sales volumes, as totals sales by volume dropped to 3,442 metric tons, down from 3,824 metric tons in the first half of 2019.
“The successful six-month period has seen record pricing achieved, and we can confirm that FY20 financial performance is on track against previous guidance,” New Zealand Board Chairman John Ryder said in a statement. “We restrained sales volume to 90 percent of last year to ensure good availability for second-half demand, yet stronger market values saw EBITDA [earnings before interest, tax, depreciation, and amortization] only 5 percent off last year.”
The company reported a record average price achieved of NZD 24.46 (USD 15.40, EUR 12.60) per kilogram, up from NZD 22.93 (USD 14.40, EUR 12.80) per kilogram in the first half of 2019. Its pro forma operating EBITDA of NZD 16.5 million (USD 10.3 million, EUR 9.2 million) was down slightly compared to NZD 17.3 million (USD 10.8 million, EUR 9.6 million) in 1H19.The firm posted a statutory net profit after tax of NZD 20.8 million (USD 13.1 million, EUR 11.6 million), an improvement from NZD 15.1 million (USD 9.5million, EUR 8.4 million) in 1H19.
New Zealand King Salmon CEO Grant Rosewarne said the company’s results are “extremely pleasing” despite a “challenging environment.”
“We’ve focused on improved performance in our aquaculture operations, whilst reinforcing our premium positioning in key salmon niches globally. We have had our challenges in previous summers, and this year, we have put everything in place for our sea farm operations to be ready for the summer.”
Rosewarne said while the company is not forecasting significant volume growth until 2022, it’s focusing on the creation and the delivery of premium salmon. He said the company was “targeting the most promising markets and channels with a diversified portfolio of salmon products.”
Additionally, Rosewarne announced New Zealand King Salmon has successfully launched pet food brand Omega Plus in China. And the company has applied to begin an open-ocean farm at a site named Blue Endeavour, seven kilometers north of Cape Lambert in the Cook Strait. The project will help the company adapt to warming waters caused by climate change, with Rosewarne calling Blue Endeavour the “future farming vision for the industry and New Zealand.”
NZKS is expecting an outcome from the application by the end of 2020. If the application is approved, the earliest possible harvest is estimated for the first quarter of 2023.
The company also said while it might be impacted by the COVID-19 coronavirus outbreak, the effect in revenues and will be low impact as sales in 2019 to China only represented 2 percent of total sales.
“The company is alert to the challenges, restraints, and opportunities arising from the COVID-19 coronavirus outbreak,” it said in a release. “Our current assessment is that impact will be low given our diversity of demand markets and options for global procurement. In the short-term, we have re-allocated the 2 percent of total sales normally destined for China into other markets at equivalent margins.”
Photo courtesy of New Zealand King Salmon
