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Lower profit but higher margin for Scottish Sea Farms in 2020

Jim Gallagher:
Jim Gallagher: "2020 stands out for altogether more positive reasons" than Covid-19. Photo: SSF.

Scottish Sea Farms managed to increase its profit margin from 15% to 16% in 2020 despite turnover dropping by almost £22.6 million to £139m during the Covid-affected year.

Operating profit was £24.514m during the year, a fall of just £932,000 on 2019, the company’s 2020 annual report shows. Profit after tax was £17.87m (2019: £19.3m).

“It would be easy to let coronavirous define our results in 2020 but for the business 2020 stands out for altogether more positive reasons,” wrote managing director Jim Gallagher.

‘Adapted well’

“Our company adapted well to the challenges of Covid-19 with each and every one of our staff adapting to new routines and behaviours. Our key workers in farming, both in freshwater and marine as well as processing carefully looked after our fish which helped support and maintain a steady, secure supply of premium quality Scottish farmed salmon to our customers globally.

“As our results show we continued to trade successfully, with a really strong biological year ending with a survival rate across our 42 farms of 91.5%.”

Gallagher added that SSF had a record year in terms of smolt inputs of 9.9 million and had record closing biomass at the end of 2020 that was 11,000 tonnes greater than at the end of 2019.

“These fish will support the sale of upwards of 36,000 tonnes of fish in 2021 and enable us to meet the insatiable demand from our customers for our salmon in all markets,” added the MD.

Better smolts

In December 2020 SSF’s £57m smolt hatchery at Barcaldine, near Oban put its 10 millionth smolt to sea. The smolts, with an increased average weight of 160 grams, will result in increased survival rates and less time at sea, wrote Gallagher.

The company invested £12m in tools and infrastructure to maintain the health of its salmon last year. Investments included:

  • £1m in the creation of 30 new roles across the company
  • £1.9m on a new vessel, the Fair Isle, to support SSF’s Northern isles farms
  • £2.3m on a Hydrolicer and support vessel, the Helen Mary, to ensure timely control of sea lice
  • £3.2m on a new farm at Hunda, Orkney, including a hybrid-power barge and two dedicated workboats.

SSF contributed £68,000 to 61 different community projects through its Heart of the Community fund.

Nothing for owners

No equity was paid to SSF’s joint owners, the Norwegian salmon farmers SalMar and Lerøy, in 2020. In 2019 the companies shared a pay-out of £45m from SSF.

SSF paid £19.66m (2019: £18.8m) in wages, social security and other pension costs for 454 employees, one fewer than in 2019.

Total renumeration for SSF’s directors was £564,000 (£1.281m), with the highest paid director receiving £554,000.

SSF paid a total of £4.867m (£4.577m) in tax.