Mixed fortunes for SSC
The Scottish Salmon Company has succeeded in lowering its production costs/kg in the first half of the year – no mean feat at a time when many producers are concerned by costs going the other way.
This was one of the highlights of the company’s Q2 report, which was published today, but the overall performance was mixed, with general biological challenges – caused largely by sea lice, as well as some problems with PD – the loss of fish at one site and a reduced harvest volume all being flagged up.
Revenues for the quarter were £28.5m (Q2 2015: £31.2m) on harvested volumes of 6,382 tonnes (Q2 2014: 8,199 tonnes), with this reduction being attributed to a result of smaller fish being harvested due to “biological and operational challenges…at a small number of sites”. Estimated harvest for the year has dropped to 26,000 tonnes – well below the company’s production peak of 31,183 tonnes in 2014.
EBIT/kg was £0.47, up from £0.29. Quarter on quarter performance has been stable with operating profit standing at £4.9m.
Key events
- A new site at Maragay Mor at Benbecula will be stocked in Q3 and will produce an additional 2,000 tonnes per cycle, with the first harvest due at the end of 2017.
- The company has plans to invest in a 5-year cleanerfish programme.
- In June, the company announced £55m refinancing agreement with Bank of Scotland, including a term loan and asset-based lending facilities. A major milestone in the company's growth strategy, it will provide flexible access to working capital.
- The company has continued to invest in expanding its export business, securing new customers in key markets including the Far East in the quarter. It currently exports to 25 countries, with export sales accounting for 42% of revenues in the quarter. A substantial export marketing programme is underway, with a presence at six international trade shows during the first half of the year.
- Promotion of the company’s new Native Hebridean strain of salmon following its introduction earlier in the year has continued. Additionally, a further extension of the company's Label Rouge was launched in Europe.
Craig Anderson, Managing Director, said: "To date 2016 has presented some challenges and despite this our earnings have remained steady.
"We are making good headway in developing our new site in the Hebrides – increasing harvest volumes to allow balanced year-round production is at the heart of our growth strategy. Our new financing arrangement with Bank of Scotland will be key to achieving this."
"Biological challenges remain an industry-wide issue for salmon farmers and we have continued to invest in collaborative solutions and as part of this have a long term project in place for including cleaner fish as part of our farming programme."
