King Salmon cautious despite rising profits

NZ King Salmon has posted strong profits, but trouble could be looming in the waters.

The company reported first half-year profits of $15.7 million, up 81 per cent compared to the same time last year when profits were $8.7 million.

But what was described as the ‘‘most difficult’’ farming year on record meant those earnings could be dented in the second half of the financial year.

NZ King Salmon chief executive Grant Rosewarne said posting a good half-yearly profit was ‘‘extremely important’’ ahead of an anticipated decline.

The company would share the second half results in early September.

‘‘When everything goes our way we’re a very profitable company. We are exposed to agricultural risk like anybody who grows anything and investors should certainly factor that in but you will see that we’ve got some really good mitigating strategies that will enable us to offset that,’’ Rosewarne said.

These strategies included being on high flow sites and increasing prices, he said.

‘‘When we have a very short supply situation is we can re-tune our pricing to compensate for the loss in volume,’’ Rosewarne said.

This summer has been the warmest summer in 20 years of record keeping, he said.

‘‘In the Pelorus [Sound] we have had over 20 degrees [water temperature] at times and anything over 16 degrees can be a problem for salmon and 24 degrees is absolutely terminal and the salmon will not survive,’’ Rosewarne said.

NZ King Salmon chairman John Ryder said the company experienced ‘‘strong demand’’ for its premium products in the six month period and ‘‘favourable conditions’’ meant the company was able to supply greater volumes.

NZ King Salmon shares traded at $1.95 on Friday afternoon.