Wednesday, April 24, 2024

King Salmon strongly back on track 

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Things go swimmingly with strong American demand and lower fish mortality.
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New Zealand King Salmon has emphatically returned to profitability, declaring a net profit after tax of $28.5 million in the 2024 financial year ended January 31.

The pro forma earnings before interest, tax, depreciation and amortisation were $24.5m, compared with a loss of $2.7m in the previous financial year, and a guidance of $23.5m to $27.5m.

Among the factors in the turnaround, fish mortality costs were cut in half from $26m to $12m with a return to cooler waters, and revenue increased 12% to $187m.

North America took 41% of the output of fish products, Australia 11% and the domestic market 36%.

Demand in North America is very strong and outstripped the supply of optimum size fish during the second half of the year.

Marlborough-based NZ King Salmon has a strong balance sheet with cash on hand of $24m, to be used for a pilot farm in the new Blue Endeavour aquaculture site 7km north of Cape Lambert in Cook Strait, well beyond the entrance to Queen Charlotte Sound.

After falling off a cliff two years ago, NZK shares plummeted from 70c to 20c and bumped along the bottom while the Blue Endeavour resource application and appeals were heard.

Now that the consent has been given and the company’s fortunes have changed, the share price has risen to 30c.

However, dividends will remain on hold for the foreseeable future as the Blue Endeavour open water farming project is developed.

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