Scottish Salmon Company on course for 33,000t harvest
The Scottish Salmon Company earned record revenues of £111.8 million in the first six months of 2019 and is on course to harvest 33,000 tonnes of fish for the full year, the company said in its half-year report today.
The revenue increase was driven by a 17% increase in harvest volumes to 18,463 tonnes, another record.
Export sales increased to 67% of production, up from 59% year on year.
Algal bloom
However, “exceptional mortality” and a one-off change in 2018 to way mortality is accounted meant EBIT per kilo fell to £1.70 before fair value adjustment from £2.11 in H1 2018.
Warmer waters resulted in an algal bloom that partially affected a site in the west coast of Scotland and a localised health challenge at a site in the Hebrides.
Craig Anderson, chief executive of the up-for-sale fish farmer, wrote: “The business has delivered strong results in the first half of the year and we remain committed to responsible business growth through our well-defined strategy.”
45,000 tonnes by 2025
He said that the record revenues came “despite a softening in market conditions and contending with localised operational and biological events that impacted production in Q2”.
He added: “Over the long-term, the aim remains to deliver steady and sustainable growth. We remain on track to achieve our target volume of 33,000 tonnes by the year-end and 45,000 tonnes by 2025 with planning consent being obtained for two sites.
“Our ongoing investment strategy continues to demonstrate results and support increased production. As we achieve greater scale, we continue to make significant investments in site development, operational capacity, biological innovations and infrastructure.”
Welboat down time
Second-quarter performance was delivered against the backdrop of biological and environmental challenges arising from two separate events that increased exceptional net mortality costs of £3m (£0.3m in H1 18), SSC reported.
In addition, wellboat down time due to repairs disrupted harvests over the peak Easter period. These events negatively impacted direct costs and also had a bearing on spot prices achieved in Q2.
Total operating costs (excluding IFRS 16 adjustment) increased from £60.7m in H1 2018 to £80.6m driven by the increased harvest volumes.
Multi-purpose vessel
Cost/kg was £4.36 in H1 2019 (£3.85), an increase SSC attributed to continued investment to support the long term sustainable growth of the business, as well as the exceptional mortality in the period of £0.16/kg and the one-off impact of the change in mortality accounting in 2018 of £0.23/kg.
SSC said that planning consent has been obtained for the expansion of a site on the Isle of Gigha, which will represent a net increase in consent of 1,900 tonnes that will come on stream in late 2020. It has also recently been granted planning permission for a new site in the north with an additional 2,000 tonnes consent.
During the first half of the year, the business continued to invest in its fleet and commissioned a first-of-its kind multi-purpose vessel that is expected to enter operation in early 2021. The versatility of the vessel will support harvesting activities as well as act as a treatment response unit.
