The Scottish Salmon Company PLC Q3 2012 Results
THE SCOTTISH SALMON COMPANY RECORDS Q3 REVENUE GROWTH AND PROFIT
The Scottish Salmon Company (SSC) reported net operating revenue of £21.5m (£17.8m) achieved on sales volume of 6,607 tonnes (4,686 tonnes) for Q3 2012, showing a "resolute" response to current industry-wide challenges.
The higher volumes recorded by SSC are the result of the Company's production imbalance. However, Salmon spot prices have weakened and feed costs have continued to rise The incidence of Amoebic Gill Disease (AGD) and other biological challenges, partlydue to higher water temperatures and high levels of salinityprevalent across Scottish salmon farming industry, has led to increased mortalities, lower growth and increased production costs.
These issues associated with the biological challenges experienced in this quarter carry over into Q4 2012, but more normal biological performance is expected in the next generation of salmon to be harvested in the first half of 2013 from Loch Fyne. Harvest volumes in the second half of 2013 will however be impacted by the Q3 2012 losses.
In Q3, the company remained profitable. EBITDA was £2.0m (£2.2m). EBIT before fair value adjustment on biomass was £0.13m (£0.69m).
The Scottish Salmon Company is focused on developing its customer base, opening up new distribution channels and securing long term contracts.
With the introduction of Freedom Food reared salmon, SSC has now commenced supply to another top UK retailer; it has increased its sales volumes to French smokers and has expanded its distribution channels to Japan and China, whilst strengthening its domestic customer relationships.
The company was also granted a new consent in Gometra, Mull, progressing the company's strategic plans to grow production volumes to 40,000 tonnes per annum. The new site will deliver up to 2,500 tonnes of salmon in 2014 and follows the successful application for another new site of similar size at Loch Torridon, in the North West Highlands, in Q2. With these sites now under development, the company expects to harvest 29,000 tonnes in 2014.
Stewart McLelland, CEO of The Scottish Salmon Company said:
"The Q3 results mirror wider industry trends and reflect the innate, natural challenges faced by the industry as a whole. Having said that, The Scottish Salmon Company has remained resolute in dealing with these challenges. We have maintained our focus on the long term, keeping the company on course to increase volumes of premium salmon to 29,000 tonnes in 2014.
"At all times during the difficulties of the past quarter, as throughout 2012, we have continued to work in close collaboration with other industry players to monitor, manage and look for solutions to the biological challenges faced over the summer. "As the outlook for the industry remains positive, we continue to promote our vision for high quality, sustainably farmed salmon worldwide and to implement plans to expand production."
Notes to Editors:
· The Scottish Salmon Company is a leading producer of Scottish salmon, providing superior salmon to both the local and international markets.
· The Scottish based and operated company is engaged in all stages of the value chain from smolt production to harvesting, processing, marketing and sales.
· Operating from over 50 sites on the Hebrides and West Coast of Scotland, from the Isle of Lewis in the north to Arran in the south, the company employs over 380 staff.
www.scottishsalmon.com
Investor Relations Su.cox@scottishsalmon.com