Covid 19 impact drives NZ King Salmon to $7.1m loss

What NZ King Salmon's proposed ocean salmon farm would look like. Photo / Supplied

The impact of Covid-19 drove New Zealand King Salmon to a $7.1m loss for the seven months to January against an $18m profit for the 12 months to June, the company said.

The South Island acquaculture company has changed to a January 31 balance date from June 30 to better reflect the business.

NZ King Salmon said its pro forma EBITDA came to $10m in the seven months, compared to $25.1m in the 2020 year.

Chairman John Ryder said it was a "creditable outcome" considering the company was recovering from the challenges posed by the pandemic.

"The full financial impact of excess inventory, caused by the pandemic, has been absorbed into these results with appropriate contingencies built in.

"Going forward, our average price will return to pre-Covid levels, however margins will still be affected by higher freight and distribution costs.

"We are seeking to increase prices globally around the middle of the calendar year with a view to recovering some of these ongoing costs."

NZ King Salmon had come through summer in reasonable shape with sea temperatures around average.

Managing director and chief executive Grant Rosewarne expected NZ King Salmon to regain its pre-Covid momentum in the coming months.

"As a company we continue to diversify, our brands remain strong and we are highly optimistic that our plans to farm in the open ocean on the Blue Endeavour site will come to fruition later this year."

NZ King Salmon's "Blue Endeavour" application to farm in the Cook Strait, 7km north of Cape Lambert is likely to go to a hearing in August.

"If successful this will drive significant economic benefits to the region, eventually delivering hundreds of green jobs to the Top of the South. It will provide better waterspace and conditions to grow our fish," Rosewarne said.

The earliest possible harvest from the venture would be mid calendar 2024.

Meanwhile, climate change would continue to impact the business.

NZ King Salmon expects to provide market guidance in mid to late 2021.

The company last year opted not to pay a dividend due to the uncertainty caused by Covid-19, higher levels of inventory and the need to preserve cash.

The board has yet to decide on when dividends would resume.