King Salmon boosts spending to combat climate change

New Zealand King Salmon Investments expects 2020 annual earnings will match this year’s take and it will boost capital spending in an effort to mitigate the higher mortality rate caused by warmer water.

The company forecasts operating earnings before interest, tax, depreciation and amortisation of $25-28.5 million in the year through June 2020. King Salmon expects ebitda to be at the lower end of a $25-28.5m range for the 2019 June year.

The company said harvest volumes will likely be about 8000 tonnes in the coming year, slightly higher than what it anticipates for the 2019 harvest, with sales weighted to the second half.

That’s a small improvement from its earlier 2020 prediction of 7900 tonnes when it downgraded its forecast from 8700 tonnes as persistently warmer water led to more fish deaths.

King Salmon previously flagged that warmer water temperature had dented its first-half earnings and signalled it wants to be at the forefront of government efforts to address climate change.

Yesterday, the company said capital spending will be about $17m for the year ending June 30, rising to $20m next year as it introduces new infrastructure to improve fish survival and performance.