Warmer waters a factor in NZ King Salmon’s $24.5m loss
NZ King Salmon has reported a $24.5 million first-half loss after warmer sea temperatures killed fish and reduced its harvest.
The company said fish deaths cost it $22.3m in the six months to July 31, compared with $10.4m in the year earlier period, when it reported a $5.6m loss.
The latest result comes after rising sea temperatures last summer killed a significant amount of fish, prompting the company to fallow three of its warmer farms in Pelorus Sound and mothball its
Waiau freshwater facility.
‘‘We had a disappointing start to the year because of high mortality,’’ said chairperson John Ryder. ‘‘We then had to begin rebuilding our biomass, and accordingly we restricted our harvest and sales.’’
The company harvested 2773 tonnes in the first half, down 19% from the 3435 tonnes in the year earlier period. It is now looking to rebuild its fish stocks from 3700 tonnes to about 5000 tonnes.
First-half sales volumes fell 21% to 2886 tonnes, but revenue remained unchanged at $80m, as the company increased its prices and sold inventories that had built up during the Covid-19 pandemic.
In the New Zealand market, its largest, the average sales price in the first half lifted to $28.24 per kg, from $24.07/kg in the same period the previous year, the company said. In the export market, excluding frozen whole fish, the average price lifted to $28.14/kg from $23.64/kg.
Noting reports of the potential for another marine heatwave this summer, NZ King Salmon said the change to its aquaculture model aimed to provide strong mitigation against these effects.
The company is pinning its hopes on being able to shift its salmon farming operation out into the cooler open ocean, 7km north of Cape Lambert in Cook Strait, a project it calls Blue Endeavour.
It expects a decision on consent for the project by the end of the year, but noted that even if the project was approved, harvesting wouldn’t occur until at least the 2027 financial year.
Earlier this year, the company raised $60.1m in a share sale to repay bank debt.
Ryder said the company had introduced a number of costsaving initiatives, although there was more work to do.
It had reduced its workforce by about 100 to 470, with only 23 redundancies due to the tight labour market. It aims to reduce staff numbers to 452.
NZ King Salmon said it remained on track for a full-year operating loss of $8m to $12m.
Shares in NZ King Salmon have shed 69% this year.