Scottish Salmon Co. revenues fall to £28.5m

Craig Anderson

The Scottish Salmon Company said its second quarter net operating revenues were £28.5 million, down from £31.2 million in the same quarter last year, as smaller harvested fish and “biological and operational challenges” including sea lice led to reduced volumes.

The Edinburgh-based and Norway-listed firm said it had harvested volumes of 6,382 tonnes, down from 8,199 tonnes last year. Its share price fell about 3% in Oslo.

“Reduced volumes were as a result of smaller fish being harvested,” said the firm.

Operating profit, though, rose from £4.3 million to £4.9 million.

The company said market conditions continued to thrive with industry prices reaching unprecedented levels.

Salmon prices remain at record highs — on average 55% higher than the previous quarter.

The firm said operating costs for the quarter were £23.5 million, down from £26.8 million last year, and had been affected by losses at one site in the Hebrides “which is currently under investigation.”

“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,” said the firm.

It said work is progressing well on a new site at Maragay Mor on Benbecula which will be stocked in the third quarter and produce an extra 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,” said the company.

It said the £55 million 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 said it has continued to invest in expanding its export business, securing new customers in key markets including the Far East.

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.

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.”

The company added: “As with the rest of the industry, we have faced biological challenges and are working collaboratively with our peers to address these.

“We have recently signed a five year contract for the supply of lumpsucker fish as part of our ongoing programme to tackle sea lice using ‘cleaner fish’ on the majority of sites.”