New Zealand King Salmon Investments Limited (NZX: NZK) 1H21 Half Year Results Announcement

Wednesday 24th February 2021

New Zealand King Salmon Investments Ltd reports its financial performance for the six month period ended 31 December 2020 (1H21).

Key points include:

• Covid-19 disruptions to both domestic and export markets have impacted profitability.

• Mitigation strategies include a global rebalancing of sales towards retail and the prioritisation of premium customer opportunities.

• Clearing excess inventory with retail price promotions and selective foodservice sales impacted margins but did improve cashflow.

• Average price achieved of $23.90/kg, slightly down from $24.46/kg in 1H20.

• Revenue of $82.4m, down from $84.2m in 1H20, reflecting lower average pricing.

• Sales volume of 3,441 tonnes was equal to 1H20.

• Pro Forma Operating EBITDA of $10.5m, compared with $16.5m in 1H20.

• Statutory NPAT of ($4.3m), down from $20.8m in 1H20.

• No interim dividend is declared.

Chairman John Ryder said: “Despite a challenging year with the Covid-19 pandemic still affecting our business, sales volumes in the six months were almost identical to the previous year. This result is encouraging considering the ongoing restrictions on foodservice, particularly in the US and Europe.

“Re-establishing our global sales incurred higher costs with expensive air freight being a significant factor.

“In the US, it’s excellent to see our Ōra King salmon now being sold via new channels, including speciality seafood online, and an increased retail presence for our Regal smoked salmon. In addition to premium branded sales recovering, we believe we have sufficient indications of positive demand to ensure clearance of all surplus fish by around mid CY21.”

New Zealand King Salmon CEO Grant Rosewarne acknowledged it had been a tough period following the continued impact of the lockdown but anticipates that sales demand will again be greater than the company’s ability to supply later in the year.

“Necessary changes to our sales strategies have impacted profitability and this has increased our determination to build resilience through channel, category and geographic diversity. Core sales have recovered better than expected – now we need to rebuild value.

“We’re optimistic that our plans to farm in the open ocean, 7kms north of Cape Lambert in the Cook Strait are progressing well. Our Blue Endeavour application is now expected to have a hearing in July/August this year. If successful, we would expect a harvest in mid CY24.”

Please see the links below for details:

NZK 1H21 Results Media Release

NZK 1H21 Results Investor Presentation

NZK 1H21 Unaudited Financial Statements

NZK 1H21 NZX Results Announcement Notice

Source: New Zealand King Salmon Investments Limited

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