Tasmanian producer delivers solid results
The company - along with its national competitor Tassal - has acknowledged that a marketing effort outside Australia is needed in order to secure sales of the growing production, although the increase in tonnage for Huon for the period was only up by 1.7%, while revenue increased by 4.5% due to higher prices. The accompanying EBITDA was up by 10% for the last half of 2014, and the value of biological assets was up by 29.1%- to AU$158.5 million (~€110 million). The company is also flush with cash, with over AU$60 million (~€41.6 million) “in the bank” at the end of the year.
Some highlights from the Huon Aquaculture Group Limited (ASX: HUO) release issued earlier this week:
The Company has delivered solid results with net profit of $25.9 million representing an 11.5% increase on the same period last year and a solid return on assets of 16.5%. Revenue growth outpaced sales volume growth in the first half as a result of increased dollars per kilogram, which has led to strong first half earnings per share of 36.5 cents (~€0.38). The profit result has been increased by the fair value adjustment of biological assets. Whilst predominantly driven by the volume of finfish with an increase of 5,788t over the first six months (June 2014 11,653t; December 2014 17,441t), the result is in line with seasonal movements of finfish held and projected harvest volumes.
Huon Aquaculture Group Managing Director and CEO, Peter Bender said the half yearly result reflected efficiencies across production activities in the first half of FY2015. “By remaining focussed on our business strategy and in particular the implementation of our Controlled Growth Strategy, we are already starting to see the benefits in the business. “The implementation of our Controlled Growth Strategy continues to proceed smoothly and is both on-time and within budget. Key operational initiatives are already demonstrating improvements in efficiency, production growth, quality and consistency, even at this early stage of implementation. This is reflected in the Company’s improved production cost per kilogram, which has reduced by $0.54 to $6.09(~€4.22)representing a 9% reduction on the same period last year.
Whilst stronger than expected production growth in the first half of 2015 has increased supply in the market, Huon has optimised customer and channel mix which has resulted in a higher average price, leading to the increased revenue. “In the second half of 2015 we will continue to drive profitable growth in the key wholesale market as well as increasing market penetration in all sales channels including retail and export,” said Mr Bender.
Huon has also re-established appropriate export channels into key Asian markets to distribute additional volume from stronger than expected production growth in first half of 2015 and will continue to utilise export channels to distribute additional volumes for the remainder of the year. Set against a backdrop of higher supply and softening prices, the Directors remain optimistic about the business which continues to trade in line with its strategic plan.
