New Zealand King Salmon back in black, posts NZD 10.6 million half-year profit

New Zealand King Salmon posted a profit in the first half of the year due to reduced mortalities and higher pricing.

The Nelson, New Zealand-based aquaculture firm scored a NZD 10.6 million (USD 6.3 million, EUR 5.9 million) half-year profit, a positive jolt compared to its net loss of NZD 24.5 million in the same time period a year prior. Its earnings before interest, taxes, depreciation and amortization (EBITDA) reached NZD 10.7 million (USD 6.4 million, EUR 6 million) in the half-year ending 31 July, 2023, up from an EBITDA loss of NZD 12.7 million (USD 7.6 million, EUR 7.1 million) year over year.

“As a business, real progress has been made in the past 12 months. We have a truly world-class product and there remains a lot of opportunity within both the existing business and future growth options,” New Zealand King Salmon CEO Carl Carrington said. “It’s a pleasing set of results and we acknowledge we have more work to do.”

According to financial results released 21 September, the company’s sales by volume improved 5 percent from 2,885 metric tons in H1 2023 to 3,024 MT in H1 2024 – a period that ended 31 July, 2023 – while its revenues rose 14 percent to NZD 91.6 million (USD 54.6 million, EUR 51.3 million) from NZD 80 million (USD 47.7 million, EUR 44.8 million).

The positive results follow on the company posting a profit for its 2023 fiscal year after a challenging 2022, during which the firm’s CEO, Grant Rosewarne, abruptly resigned, and after it sold off additional stock in an effort to pay off debt.

“The first half result has seen a continuation of our turnaround which started in FY23,” New Zealand King Salmon Chairman Mark Dewdney said. “Our new farming strategies have resulted in reductions in mortality … This, combined with a focus on operational excellence across our processing and sales operations, has resulted in a strong result for the first half of FY24.”

Dewdney applauded Carrington, who was hired in July, and the firm’s previous acting CEO, Graeme Tregidga for navigating a set of difficult financial circumstances. Tregidga has returned to his previous role as general manager of sales.

“It is an exciting time for the company; with performance improving, the appointment of a new chief executive officer … and the successful completion of the Blue Endeavour resource consent application mediation.  Carl has joined at an exciting time and the Board is looking forward to working with Carl and the whole NZKS team to continue to strengthen the resilience of and optimize the existing business, while continuing to develop growth options as part of a strategic and operational reset.”

The company’s Blue Endeavor project involves the relocation of some of its net-pens to deeper water to mitigate the impacts of warming water due to global warming. The company was given final permission for the move in June 2023, according to Radio New Zealand.

In H1 2024, the company posted decreased mortality costs of NZD 7.8 million (USD 4.7 million, EUR 4.4 million), down from NZD 22.3 million (USD 13.3 million, EUR 12.5 million) year over year. It revised its earnings guidance up to a range of NZD 23.5 million to NZD 27.5 million (USD 14 million to USD 16.4 million, EUR 13.2 million to EUR 15.4 million), from its originally provided range of NZD 21 million to NZD 25 million (USD 12.5 million to USD 14.9 million, EUR 11.8 million to EUR 14 million).

New Zealand King Salmon is traded on New Zealand's Exchange and the Australian Stock Exchange. Its share price was at NZD 0.22 (USD 0.13, EUR 0.12) on Friday, 22 September, with a 52-week high of NZD 0.30 (USD 0.18, EUR 0.17) and a low of NZD 0.18 (USD 0.11, EUR 0.10).

Photo courtesy of New Zealand King Salmon