Investment in growth and overseas markets remain Priorities
Highlights
Net Q2 operating revenues of £28.5m (Q2 2015: £31.2m)
- Operating profit £4.9m (Q2 2015: £4.3m)
- EBIT/kg before fair value adjustment of £0.47 (Q2 2015: £0.29)
- 6,382 tonnes harvested (Q2 2015: 8,199 tonnes)
- £55m refinancing package offers greater flexibility and working capital
The Scottish Salmon Company PLC has issued its Q2 2016 and half year results. Revenues for the quarter were £28.5m (Q2 2015: £31.2m) on harvested volumes of 6,382 tonnes (Q2 2014: 8,199 tonnes). Quarter on quarter performance has been stable with operating profit standing at £4.9m. Reduced volumes were as a result of smaller fish being harvested.
Market conditions continue to thrive with industry prices reaching unprecedented levels. Biological and operational challenges during Q2 have impacted on harvest volumes at a small number of sites however measures are in place to address these challenges. Work is progressing well on a new site at Maragay Mor at Benbecula which will be stocked in Q3, this will produce an additional 2,000 tonnes of harvested volume.
In June, The Scottish Salmon Company announced new banking arrangements with Bank of Scotland. The move marked the first time a salmon farming company has used a Scottish bank to deliver full banking and ancillary services. The £55m refinancing agreement, including a term loan and asset-based lending facilities is a major milestone in the company's growth strategy, providing flexible access to working capital.
The Company has continued to invest in expanding its export business, securing new customers in key markets including the Far East in the quarter. It currently exports to 25 countries, accounting for 42% of revenues in the quarter. A substantial export marketing programme is underway with a presence at six international trade shows during the first half of the year.
Promotion of the Native Hebridean Salmon following its introduction earlier in the year has continued, additionally, a further extension of the Company's Label Rouge was launched in Europe.
Craig Anderson, Managing Director at The Scottish Salmon Company, said:
"To date 2016 has presented some challenges and despite this our earnings have remained steady"
"We are making good headway in developing our new site in the Hebrides - increasing harvest volumes to allow balanced year round production is at the heart of our growth strategy. Our new financing arrangement with Bank of Scotland will be key to achieving this."
"Biological challenges remain an industry wide issue for salmon farmers and we have continued to invest in collaborative solutions and as part of this have a long term project in place for including cleaner fish as part of our farming programme."
