Fire, theft and freight costs: Huon announces loss of €78.9 million

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Huon Aquaculture has reported a full-year loss of A$128 million (€78.9 million).

Huon Aquaculture told the Australian Securities Exchange it had been a “turbulent year” for the company, resulting in a full-year statutory loss of A$128 million. Soaring freight costs, the theft of tonnes of salmon from a NSW processing plant and a fish pen fire are being blamed for a multi-million-dollar full-year loss for the Tasmanian salmon producer.

“While there was some respite in the last few months of the year from the challenges faced by Huon during much of FY2021, the overall pressures placed on the business from the market-related impacts from COVID-19 were significant,” the company statement said.

“The two main contributors were the 12 per cent fall in the average international salmon price … compared to the previous year and the significant increase in freight charges due to limited access to international flights.”

Huon said bad timing was partially to blame, with COVID-19 coinciding with a  ramp-up in salmon production aimed at overseas buyers. Meanwhile, international freight costs jumped A$34 million over the 2021 financial year — a rise of 49 per cent per kilo of fish — and the global salmon price dropped 12 per cent over the year.

But the company’s problems went beyond the pandemic. In November last year, a fire in a fish pen in the D’Entrecasteaux Channel resulted in the loss of 50,000 full-grown fish. Soon after, a fish pen net was cut during cleaning, allowing another 130,000 fish to swim away. This coincided with the charging of five people over the alleged theft of 250 tonnes of salmon from the Huon processing plant in Ingleburn. Police say the group was reporting salmon as waste, and then selling it on to a third party. The combined cost of the fish pen accidents and theft has been put at A$4 million.

Huon said it was expecting conditions to improve in 2022: “The outlook for revenue is more positive compared to this time last year,” it told the exchange. “Retail demand in the domestic market has returned to its long-term average growth rate of 10 per cent and Huon will deliver its first full twelve months of sales under two new three-year contracts with Coles and Woolworths.”

Huon is the target of a takeover bid from Brazilian food processing giant JBS, which values Huon at around A$550 million.

Deep water ‘Fortress Pens’: PHOTO: Huon Aquaculture