The Scottish Salmon Company PLC Reports Q2 2013 and First Half Year Results
The Scottish Salmon Company (SSC) has reported half year results showing an improving performance over the first six months of 2013 with a buoyant sales market and a realisation of cost efficiencies in Q2.
Revenues for the second quarter of 2013 reached £23.7m (2012, £17.5m) totalling £42.5m for the six months from January to June (2012, £30.2m). EBIT before fair value adjustment for biomass stands at £3.8m for the quarter (2012, £0.3m) and £5.6m for the half year (2012, -£0.1m).
Good biological performance of the salmon harvested in the first six months of 2013 ensured high quality salmon capable of achieving good prices as global markets rose. The good growth and quality of the harvested fish also opened up opportunities for increased export sales during Q2.
At the same time, with stock harvested from Loch Fyne and processed locally at SSC's Cairndow facility production efficiencies achieved positively impacted on the results for the year to date.
Investment in new sites continues as SSC acts to address an imbalance of production cycles across its operation on a year-round and year-in-year-out basis. Q2 saw the development of a new site and an extension of an existing site at Loch Striven giving rise to investment in new and replacement equipment accounting for £1.6m of capital expenditure in Q2, while consent for a new site at Reibinish in the Hebrides was also secured.
The company is also recruiting for its processing facility in Stornoway and hiring around 25 staff as it prepares to re-open its gutting line at Marybank in early autumn. Salmon scheduled for harvest in H2 from across the Western Isles and the Highlands continue to perform well with favourable environmental conditions contributing to an improvement in the biological performance of the growing fish in the first half of the year.
The second half of the year will represent a period of higher costs for the company. Fish to be harvested are from the sites affected by Amoebic Gill Disease (AGD) in 2012, and production costs will reflect the level of treatment and management required at the time to deal with the issue that impacted the whole industry.
The current forecast for 2013 harvest volumes is 21,000 tonnes, with harvest guidance for 2014 at approximately 27,000 tonnes.
Dr. Stewart McLelland, Chief Executive Officer for The Scottish Salmon Company said:
"The global outlook for salmon is positive with growth in demand exceeding current projections for growth in supply and a consequential rise in the underlying traded prices of salmon. This has led to a significant boost to sales in Q2 and has allowed us to renegotiate around half of our contracted salmon to take advantage of the price rises.
"The biological development of current stock is good and performing normally, but against this positive backdrop we must expect higher production costs in the second half of 2013 because of historic issues with AGD."