Benchmark buoyed by increasing demand for salmon eggs
Aquaculture health, nutrition and genetics business Benchmark has announced a 68% increase in adjusted EBITDA – a reflection of underlying profitability - from £10.1 million in 2017 to £17m last year.
Revenues increased more modestly, from £140.2m in 2017 to £151.5m, and the company still made a net loss of £4.4m, although this was a reduction on the £7.1m deficit in 2017. Net debt increased from £23.9m to £55.7m.
The company’s Genetics division, which produces salmon eggs, was the star performer, with revenues up by 17% to £35.8m and adjusted EBITDA rising by 36% to £7.9m.
Superior genetic profile
“This is a result of our technology leadership and strong position in our key markets and growing demand for salmon eggs with a superior genetic profile,” said chief executive Malcolm Pye in a report accompanying the results.
“We are continuously working to offer incremental genetic improvements to our customers, particularly in the area of disease resistance. During the year we launched new cardiomyopathy syndrome (CMS) resistant eggs which were very well received with demand outstripping supply and demand for our sea lice resistant eggs also exceeded supply.
“Our new facilities in Salten, Norway, and Chile, through the joint venture with AquaChile, enable us to meet that demand and underpin our future growth and profitability in salmon genetics.”
Encouraging results
Pye said field trials of Benchmark’s disease resistant shrimp had shown very encouraging results, “which we believe will enable us to build a very significant new business in shrimp genetics”.
Increasing demand from shrimp farmers for higher margin, specialist replacement diets and health products helped revenues in the company’s Advanced Nutrition division rise 2% to £85.8m, with adjusted EBITDA up by 22% to £21.6m.
Commercial-scale field trials with what Benchmark calls its “highly innovative next generation sea lice treatment” are reported to be progressing well with three of the world's largest salmon producers, having delivered almost 100% efficacy with improved animal welfare and no environmental impact.
Trials in other markets
“We are continuing trials in Norway and are preparing for field trials in other markets,” wrote Pye. “Feedback from customers so far points to a high acceptance of our new treatment as sea lice continues to be recognised as the biggest challenge for the salmon aquaculture industry.”
Benchmark has prioritised the development of its seabream and seabass vaccines following strong performance in recent trials. Commercial trials are expected to start this year.
The company has also signalled its intent to streamline its activities towards aquaculture by licensing its companion animal (pet) products to other companies.
