Seafood producers post mixed results

Posted by Isobel Drake on 24th February 2009

Tassal, Tasmania’s leading Salmon producer, has continued to build on recent earnings momentum, while the Port Lincoln-based Clean Seas Tuna has recorded a net loss of $6.6 million for the first half – a result expected to be turned around in the next six months due to the seasonal nature of their business.

Tassal’s net profit after tax was $13.475 million for the first half, a 44.5% rise on last year.

Tassal Group’s Managing Director and Chief Executive Officer, Mark Ryan said market growth in Australia and cost-cutting initiatives had been two of the keys to the strong sales figures. “It is extremely pleasing to deliver another solid profit outcome in such a difficult economic climate,” he said. “We have achieved encouraging domestic market growth whilst continuing to implement cost reduction initiatives and deliver the benefits flowing from our ongoing capital investment program,” he commented. “We acknowledge the challenges ahead that the current economic environment has presented, but we remain excited by the opportunities that continue to present themselves.”

Strong growth in salmon sales revenue was achieved, including almost 30 per cent growth in the domestic market on the back of a volume increase of 27.7%

The company is planning to continue spending on research & development with a focus on fish husbandry and a selective breeding program.

“Our balance sheet remains strong, with low gearing allowing Tassal to sustainably pursue both organic and acquisitive growth, including fast-tracking our capital expenditure program where projects will generate an attractive return on investment,” Mr Ryan added. “Tassal continues to track strongly, and we maintain our full year 2009 guidance.”

Clean Seas Tuna saw farmgate sales revenue up 46% despite recording a net loss, with farmgate sales/kg for Kingfish up 5% from 30 June 2008.

For the current financial year they anticipate production growth of around 38%, with the net loss for the first 6 months likely to be recouped in the second half.

“The company’s FY2009 forecast still anticipates that the first half operating losses will be recovered during the second half of FY2009, given the seasonal nature of the Kingfish and Mulloway business which results in strong growth (approximately 75% of total annual production) in the warmer second half of each financial year,” Marcus Stehr, Managing Director of Clean Seas, said.

An unrealised foreign exchange loss of $1.7 million has been taken up in the first-half results, but the current relative weakness of the Australian Dollar is viewed by the Clean Seas Board as positive for the near term future of its operations as it is seen as likely to assist in boosting their international customer base.