Revenue down for New Zealand King Salmon due to lower sales volume

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CEO says company isn’t forecasting significant volume growth until 2022.

New Zealand King Salmon posted its financial performance for the six month period ended 31 December 2019 (1H20) with revenues of NZD 84.2 million, down slightly from NZD 87.7m in 1H19, due to lower sales volume.

EBIT was NZD 12.6 million, down 12 per cent compared with NZD 14.3 million in 1H19. Sales volume were down to 3,442 tonnes down from 3,824 tonnes in 1H19.

Chairman John Ryder said “We are pleased to announce first-half results ahead of our expectations. The successful six-month period has seen record pricing achieved, and we can confirm that FY20 financial performance is on track against previous Guidance. We restrained sales volume to 90% of last year to ensure good availability for second-half demand, yet stronger market values saw EBITDA only 5% off last year.”

“It’s a solid start to the year considering lower volume available. North America continues to perform strongly, and our brand and innovation strategy is driving value growth across all markets,” he added.

New Zealand King Salmon CEO Grant Rosewarne described the company’s results as “extremely pleasing in 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.

“As we aren’t forecasting significant volume growth until 2022, we’re aiming to use every part of our salmon to create premium products. We’ve successfully launched our pet food brand Omega Plus in China and we’re actively targeting the most promising markets and channels with our diversified portfolio of salmon products.

“We’re also optimistic that our longer-term growth plans are progressing well, with our pending application to commence open ocean farming, at a site named Blue Endeavour, 7kms north of Cape Lambert in the Cook Strait. We see Blue Endeavour as a key part of the company adapting to climate change,” he added

On disruption from the effects of the coronavirus, Rosewarne added. “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% of total sales normally destined for China, into other markets at equivalent margins.”

The Board also declared a fully imputed interim dividend of 2.0 cents per share, to be paid on 20 March.