Salmon farm. (Photo: NZKS)

King Salmon increases earnings forecasts for 2017

NEW ZEALAND
Tuesday, June 27, 2017, 22:30 (GMT + 9)

Strong ongoing market demand and continued positive fish performance led New Zealand King Salmon Investments Limited managers to forecast operating earnings that are above initial expectations.

Now pro-forma operating EBITDA for the full financial year to June 30 is expected to reach between NZD 20.5 million (USD 14.9 million) and NZD 21 million (USD 15.2 million). These figures represent an increase from the NZD 19.2 million (USD 13.9 million) originally forecast by the firm in its statement for its initial public offering when it first publicly-traded in September 2016.

During the analysed financial year, the firm experienced extra costs due to the fact that the Ministry for Primary Industries proposed a salmon farm relocation process, which is currently being worked through.

Nevertheless, following finalisation of the New Zealand King Salmon Group’s 2018 budgets, the directors confirmed that the firm continues to expect to meet the 2018 financial year forecast, being a pro-forma operating EBITDA of NZD 22.4 million (USD 16.3 million).

Chief executive Grant Rosewarne said although the forecasted numbers came as no surprise, the company would look to meet its immediate goals before making any long term plans.

He stressed that through the Foodstuffs chain, King Salmon's Omega Plus pet food operation has expanded into the North Island in recent weeks. The firm’s chief executive said the company was targeting becoming NZ's number six pet food manufacturer in the country within the next 12 months.

He also stated that key to the firm's future was a central government-led relocation of six salmon farms in the Marlborough Sounds to deeper, higher-flow locations over a surface area of nine hectares.

The move was expected to add up to around NZD 49 million annually to the regional gross domestic product (GDP) and create around 511 full time jobs.

On the other hand, Rosewarne said the company was "very satisfied" with its position after private sector union E tu won a landmark deal with NZKS last week, which will see wages for the lowest-paid workers increase by more than 10 per cent.

New Zealand King Salmon operates under four key brands: Ōra King, Regal, Southern Ocean, and Omega Plus, as well as the New Zealand King Salmon label.
 
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