NZ King Salmon posts 67% reduction in EBIT

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Margins will still be affected by higher freight and distribution costs.

NZ King Salmon posted its half-year results (results for the seven months ended 31 January) with profitability impacted by COVID-19 and related clearance of excess inventory at lower prices.

The salmon farmer posted an EBIT of EUR 2.9 million. A 67 per-cent drop compared to EUR 9 million the period before. Revenue was EUR 56.5 million, down six per-cent from EUR 60.2 million in 2020.

“It is a creditable outcome considering we are recovering from the challenges of the Covid-19 pandemic. The full financial impact of excess inventory, caused by the pandemic, has been absorbed into these results with appropriate contingencies built in,” said chairman John Ryder.

“Going forward, our average price will return to pre-Covid levels, however, margins will still be affected by higher freight and distribution costs. We are seeking to increase prices globally around the middle of the calendar year with a view to recovering some of these ongoing costs. Pleasingly, we have come through summer in reasonable shape with sea temperatures around average,” Ryder added.

Managing director and CEO Grant Rosewarne agreed the recent trading period had been tough.

“I am looking forward to the coming months and returning to our pre-Covid momentum. As a company we continue to diversify, our brands remain strong and we are highly optimistic that our plans to farm in the open ocean on the Blue Endeavour site (open ocean farming site .ed) will come to fruition later this year,” he said.

NZ King Salmon expects to provide market guidance in mid to late 2021. The board has yet to make a decision on the resumption of dividends.