The Scottish Salmon Company has booked lower first-half sales and underlying earnings but the firm said market conditions “continue to thrive with industry prices reaching unprecedented levels”.
The business posted revenue of GBP57.6m (US$75.8m) for the first half of 2016, compared to the GBP58.5m reported for the corresponding period last year.
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EBIT before fair value adjustment for biomass stood at GBP5.1m, down from GBP7.1m a year ago.
The Scottish Salmon Company filed net earnings of GBP16.9m for the first half of 2016, versus a net loss of GBP4.8m a year earlier. The fair value adjustment on biomass was to the group’s benefit in the first six months of this year, with the company booking a gain of GBP17.4m. In the first half of 2015, it book a loss on the adjustment of GBP13m.
The company said while revenues and earnings before fair value adjustment were down, “this can mostly be attributed to reduced harvest volumes”. Overall, the group’s performance in the first half “was solid, against a backdrop of some operational challenges”.
A GBP55m refinancing package the group agreed with the Bank of Scotland last June marked “a major milestone in the company’s growth strategy”, Scottish Salmon said. The package “will provide flexible access to working capital as we continue the implementation of our growth strategy”.
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By GlobalDataIn addition, the company said it has renegotiated feed contracts for the next two years which, “setting aside exchange rate impacts post-Brexit vote, will not only yield cost benefits but also provide an enhanced service from our feed suppliers”.
Scottish Salmon said in common with the rest of the industry it had faced “biological challenges and we are working collaboratively with our peers to address these”. The company said it had recently signed a five-year contract for the supply of lumpsucker fish as part of an ongoing programme to tackle sea lice using ‘cleaner fish’ on the majority of sites. “This will complement our ballan wrasse breeding initiatives. We also launched two industry projects last year which were co-sponsored by Scottish Aquaculture Innovation Centre.”
