With earnings up, Scottish Salmon Co. to double spend

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The Scottish Salmon Company has reported an EBITDA of GBP 8.6 million for the fourth-quarter of 2017, up over GBP 7 million on the same period a year ago, as North American exports grew to overcome the “unprecedented mortality” of 2016.

The company posted an EBIT of GBP 6.5 million in the quarter to erase a small EBIT loss for the period in 2016. EBIT per kilogram was GBP 0.95, up from 0.17 in Q4 2016.

Net operating revenues were up on first-time North American exports to GBP 39.9 million, or up GBP 12 million over the same period a year-ago despite an early 2017 harvest. Scottish spot and market prices were strong, the company said, and are expected to remain so in 2018.

Speaking in Oslo, company chief financial officer Fiona Larkin said that the company’s contract pricing was stronger and contract shares were on the rise. Company CEO, Craig Anderson, said the company was making money after negotiations with its U.S. clients while consolidating smaller grow-outs into “super-sites” where one feed barge could serve two net-pen arrays rather than one.

More spend
“Five years ago we were considered a processing company. We’re in the food-business now,” he said, adding that volume and quality were agreed with customers and not negotiated based on Fishpool prices.

Scottish harvested 6,874 tonnes in the fourth-quarter, up about 1,100 t over the same period a year ago. The company harvested 25,272 t for the year, and that was up slightly over the 24,342 seen in “catastrophic year” 2016.

Larkin said the company intends to double investments in 2018 to GBP 24 million. After the seeing volumes eaten up by biology issues, the company is putting the money is a series of measures including more vaccination, cleaner fish, mechanical treatments and expertise.

New normal
“For the foreseeable future, this should be seen as a normal part of our costs,” Larkin said.

Meanwhile, the company will move its hatcheries around as part of a new “fresh-water strategy” that includes a pact with Hendrix Genetiecs and it will stock its two 4,000-t super-sites in 2018. One’s in operation and one will be stocked this year, as economies of scale are sought.

Staff, too, will be moved, as six smaller sites of the company’s 45 are fallowed in 2018 and an Argyle processing site opens to achieve what Anderson said was “balance”.

“We’ve balanced it from north (grow-outs) to south (processing). 2018 will not be negative to 2017 on a contract-value basis,” he said.