Huon nets huge harvest: company says good times are ahead

HUON Aquaculture scooped up 48 per cent more tonnes of salmon in the first half of the financial year but the fish farmer’s interim net profit sank 14 per cent on lower international prices and higher fish food costs.

Huon has had two challenging years during which profits were stung by a jellyfish invasion but it assured investors yesterday that the harvest has jumped 48 per cent to 13,300 tonnes, and should continue to leap. The company is reaping the rewards of its heavy investment in rebuilding biomass, the measurement of the weigh of a volume of the fish in the water, Huon says.

The average salmon harvested in the last six months of 2019 weighed a hefty 5.07 kilograms compared with 4.1kg in the first six months of 2019.

Fish are the biggest they have ever been at this time of year, survival rates the highest and with improved feed conversion rates, Huon says.

The bigger fish are making sales easier in the international market, particularly in the China market where there is a preference for larger fish. During

the first half revenue jumped 31 per cent to $178.1 million compared with the prior first half but interim net profit came in at $22 million compared with $26.4 million.

Operating net profit declined $3.7 million in the first half of 2019-20 due to a change in channel mix, which resulted in a 12 per cent fall in average price, Huon said.

It also had higher interest and depreciation charges due to the mostly debt-funded increase in capital expenditure during the past two years.

The good news, Huon says, is the 13,300-tonne harvest for the first six months puts it on track to meet its full-year harvest forecast of at least 25,000 tonnes.

Demand continues to exceed supply and while fish food costs will remain high this calendar year, international pricing is also likely to be 17 per cent higher than the last financial quarter. There is also enough biomass in the water to underpin increased production in the financial years of 2021 and 2022. Huon Aquaculture shares were 7c lower at $4.48 at ASX close yesterday.