Will a hot summer cook NZ King Salmon’s chances of a fat profit?
Health & Biotech
Link copied to
A long hot summer might have fried New Zealand King Salmon’s full-year profit.
New NZ King Salmon is the world’s biggest aquaculture producer of premium King salmon. It’s been going for 30 years and employs 500 people.
The fish farmer has been warning investors since February that unusually warm water over the summer “has been particularly challenging for fish survival”.
But Autumnal weather had thankfully reduced fish stress, NZ King Salmon told investors today in a “Fish Performance Update”.
The farmer reckons it could still harvest 8000 metric tonnes (mt) of fish in the 12 months of its fiscal 2017.
In the first-half of fiscal 2017, the harvest rose 30 per cent to 4424mt.
The company made a forecast in early November last year that it would sell 8000mt of its rare-breed King salmon, It also reckoned full-year profit would be $24.5 million to $26 million, up from the $22.4 million forecast in the 2016 IPO prospectus.
NZ King Salmon (ASX:NZK) chairman John Ryder warned in February the numbers for the six months to June won’t be as tasty as the prior period, thanks to higher fish deaths.
Managing director and CEO Grant Rosewarne says they’ll make the profit target, but on “hundreds of tonnes” less fish.
Mr Rosewarne said they used mitigation measures such as putting more stock in cooler sites or high water flow site, and give the animals good nutrition and keep predators away.
He says that in 30 years of data keeping they have never seen temperatures like those over summer. Their calculations forecast those temperatures to start kicking in from 2045 or 2050 — not 2018.
But he also says they believe this is a combination of climate change and a climatic event, rather than just the former.
They are currently breeding fish to withstand temperatures two degrees higher but they were caught out this year.
NZ King Salmon shares in Australia were flat at $2.12, but in New Zealand dipped slightly to $NZ2.39.