A combination of strong global demand and a boost in the volume available has helped New Zealand King Salmon Investments Ltd (NZX and ASX:NZK) (the Company) deliver a record first-half profit result. Key highlights of the Company’s first-half result, which were reported today, include:
- Net Profit After Tax of $15.7 million, up 81% on the comparable six month period to 31 December 2016 (1H17).
- Pro Forma Operating EBITDA of $19.5 million, 169% ahead of 1H17.1
- Fully imputed dividend of 2.0 cents per share (cps) declared.
- 4,392 metric tonnes of gilled and gutted salmon sold, up 29% on 1H17.
- Average selling price improved as branding penetration increases, mainly due to Ōra King salesup 22% on 1H17.
- Impact of summer temperatures on fish survival will be reported following the summer period, aswe did last year.
“The Company experienced strong demand for its premium King salmon products over the six month period. Favourable growing conditions during the FY2017 year allowed us to deliver additional volume to satisfy the demand. However, the situation has now become more challenging. The extraordinarily hot summer has impacted the survival rates of our King salmon, and this will be a principal factor behind an anticipated reduction in profits for the second half” said Chairman John Ryder.
“We remain positive about the longer-term prospects for our Company” said Ryder.
The Company continues to execute on its premium branded strategy, said Managing Director and CEO Grant Rosewarne.
“In addition to achieving strong growth in sales volumes, we have also made significant gains in the average selling price of our salmon. This mainly reflects increased sales of Ōra King whole salmon, but also represents our focus on the right mix of product and customer. A nationwide advertising campaign for Regal coupled with new product launches also positions us well for future sales of our premium branded retail products. We’re confident in the strong foundation we’re building for the long-term performance of the Company,” said Rosewarne.
“Our aquaculture team has been actively preparing the farms in anticipation of the warmer summer months, however this year, water temperatures have been well above-average. Our recently- commissioned higher-flow sites have lessened the impact of the sustained heat, although, like many other farmers on land and in the sea, we have had associated performance and survival challenges. As a result, growth in sales volumes will be impacted during the second half of the financial year and into FY2019F. We’ll report in more detail once the summer period is over as we did last year, including an update on our progress towards a long term solution to combat the risk of increasing sea temperatures. The company is in a strong financial position with a positive net cash position as at 31 December 2017.”
“We’re also pleased to see the Ministry for Primary Industries’ proposal to relocate up to six salmon farms advance to the next stage with the recent publication of the Marlborough Salmon Farm Relocation Advisory Panel recommendations. The panel recognised the ‘distinct environmental advantages’ of higher-flow sites, as well as the positive social and economic outcomes. We look forward to working with Government, Council and our community to progress our vision for best-practice salmon farming.”
New Zealand King Salmon has declared a fully imputed final dividend of 2.0 cents per share to be paid on 23 March 2018.