NZ King Salmon raises 2018 earnings forecast
By Tina Morrison
Nov. 2 (BusinessDesk) - New Zealand King Salmon Investments, the world's largest aquaculture producer of king salmon, raised its forecast for 2018 annual earnings as the business tracks better than expected.
The Nelson-based company said pro-forma operating earnings before interest, tax, depreciation and amortisation are expected to be between $24.5 million and $26 million in the year ending June 30, 2018, ahead of the $22.4 million forecast in its disclosure statement for its initial public offering in September 2016, and up from $21.6 million in 2017. The first half of the 2018 financial year is expected to be "materially above" the comparable period, the company said in a statement, without providing figures.
King Salmon shares have soared 78 percent this year as it reaps the benefits from its focus on premium products, where limited supplies are driving up values. The fish farmer said today that its sales pricing remains solid in all markets. Other contributors to the higher earnings forecast were improved fish survival, stronger than forecast fish growth during the summer of the 2017 financial year, a lift in forecast sales volume for the 2018 financial year to about 8,000 tonnes from 7,480 tonnes, and lower than forecast feed prices for the first half of the 2018 financial year.
The company noted that the split of earnings between the first and second half of the financial year would differ from last year due to one-off factors, and that the summer period may have a material impact on fish performance and full-year earnings.
Its shares last traded at $2.27, just shy of their record $2.29 touched last week and up from their $1.12 initial public offering price last year.