Huon Aquaculture downgrades production forecast because of jellyfish

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Warming waters bringing more blooms to Tasmania, Australia.

In a press release, the Tasmanian salmon farmer Huon Aquaculture has posted that blooms of jellyfish are continuing to sting its stock and because of this, it has had to downgrade its production forecast.

The company has cut its harvest tonnage forecast for this financial year from 20,000 tonnes to 19,000 tonnes. This is in part impacted by the decision not to bring forward fish for harvest scheduled for the FY2020 year.

At the time of reporting its half-year results in February 2019, Huon indicated that the current year’s performance was being adversely affected by three events, two of which would have a greater impact in the second half. These were:

  • The water temperature in Huon’s southern Tasmanian growing sites typically falls during March and April to below 16 degrees, providing the ideal conditions for fish growth. Warm summer conditions have persisted along the east coast of Australia, including Tasmania, right through to April.
  • A moon jellyfish bloom in the Huon River and D’Entrecasteaux Channel in November 2018 which initially caused an increase in fish mortalities but has since delivered a more serious secondary impact through the development of gill necrosis. While the high mortality rates we reported in January and February have now returned to normal levels, the presence of gill necrosis has meant fish growth rates returning to normal levels has taken longer than initially expected, exacerbated by the slow return to normal water temperatures.

Lower production volumes have also resulted in higher per kg operating costs given the high fixed cost nature of Huon’s business. This together with additional expenditure associated with fish mortalities and managing the secondary impact of the jellyfish bloom has reduced their forecast for operating EBITDA in FY2019 to EUR 31.2 million to EUR 34.3 million compared to that announced in February of EUR 40 million to EUR 42.4 million, which was down from FY2018 Operating EBITDA of EUR 44.8 million.

“As the biomass is rebuilt over 2019 and with the decision not to bring some harvest tonnage forward from FY2020, we have increased confidence in our February guidance of a return to production volumes in FY2020 of at least 25,000 tonnes,” the company wrote.