King Salmon sees flat earnings for 2020 on slightly bigger harvest

Friday 21st June 2019

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 $25-28.5 million range for the 2019 June year.

The company said harvest volumes will likely be about 8,000 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 7,900 tonnes when it downgraded its forecast from 8,700 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 has signalled it wants to be at the forefront of the government's efforts to address climate change.

Last month, it outlined several initiatives it had underway to mitigate the impact of climate change, which would lift its capital spending and reduce harvest volumes for the next few years.

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

Separately, Chiong Yong Tiong was appointed to the board as a representative of cornerstone shareholder Oregon Group, effective from June 19. King Salmon's founding director Thomas Song died in April following a sudden illness.

King Salmon shares last traded at $2.17, and have declined 7.7 percent during the past 12 months.

(BusinessDesk)

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