New Zealand King Salmon (ASX:NZK) had some rare good news this morning in a tough year for the sector (Image via Getty)
It’s been a tough year for ASX seafood stocks, but New Zealand King Salmon just upgraded guidance
Food & Agriculture
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While 2021 has seen little success for ASX seafood stocks, New Zealand King Salmon (ASX:NZK) gave its shareholders an early Christmas present, in the form of upgraded earnings.
New Zealand King Salmon previously tipped $8m-$10m in FY22 earnings, but it’s bumped that up to $10.5m-$12.5m.
In a brief statement to shareholders, the company noted trading conditions were tough with elevated freight costs, inflationary pressure in raw materials and COVID restrictions on end customers (such as restaurants).
However, the company’s net financial performance didn’t suffer. New Zealand King Salmon put that down to its changed farming model had resulted in improved fish sizes – reaping a greater premium.
This morning’s announcement failed to excite the market with shares failing to move and sitting on a 13% decline in 2021.
New Zealand King Salmon (ASX:NZK) share price chart
ASX seafood stocks
Many other ASX seafood stocks have struggled with the issues that NZK flagged this morning.
But there have been two standout performers this year.
One is Murray Cod Australia (ASX:MCA) which is likewise a fish breeder and exporter and has had a turbulant few years.
The company’s lows include a pond failure in 2017 while also having to assure investors in 2019 that it didn’t source fish from the Darling River.
But its highs include a partnership with celebrity chef Heston Blumenthal and turning losses into profits from FY20 to FY21.
The latter achievement led to a major rally in its share price at the start of the year. While it has failed to excite investors in recent weeks, it has recommenced exports to many overseas markets including the USA and Japan.
The other good news story of 2021 was Huon (ASX:HUO) which was acquired for $425 million by Brazilian meat giant JBS – after seing off a competing bid from iron ore magnate Andrew Forrest.
Fellow Tasmanian seafood producer Tassal (ASX:TGR) also saw a brief rally amidst the takeover offer, but slipped back into a negative yearly return in recent weeks as the deal completed.
