Houn Aquaculture´s farm in Port Stephens. (Photo: Huon Aquaculture)

Huon saw profit growth in second half of 2017

Huon Aquaculture Group Limited’s financial results for the last six months of last year confirm profit growth, which the company predicted following the completion of their three year capital investment program, in 2016.

Huon reported an increase of 28 percent in revenues for the last six months in 2017, which enabled the company to build on an improvement in biological and financial results achieved in the whole last year.

This result was supported by good fish growing conditions, having a record average fish weight of 5.29 kg due to improved fish diets and the initiative to increase smolt size to sea.

Profitability for the semester that ended 31 December 2017 continued to improve, building on the strong gains made in the previous corresponding period. Production volumes increased 35 percent, in line with the guidance provided in August 2017.   

Sales revenue increased 28 percent to AUD 170.5 million (USD 134,7 million), due to the continued strength in domestic salmon pricing and increased production volumes..

The company achieved keeping the tonnage sold into the domestic market was maintained, taking advantage of a stable wholesale and retail pricing environment, while 29 percent of production volumes went into the export channel, where Asia showed strong demand.

“The development of a sustainable, long term client base in Asia is dependent on strong relationships that have been carefully nurtured over time. These relationships open doors to opportunities that would not otherwise be available. As we expand the business I am confident that the agreements we are putting in place across Asia to lock in sales at premium price levels, will remove much of the uncertainty and volatility that is currently associated with our sales into export markets,” said Huon Managing Director and CEO, Peter Bender.     

The company obtained an AUD of 12.3 million (USD 9.7 million) gain in the Fair Value Adjustment of Huon’s Biological Assets, result that reflects the moderate increase in biomass levels since June 2017 (+3 percent). This, combined with the overall easing in the average sale price due to the increased weighting to lower priced exports, has reduced the gain relative to that recorded the previous corresponding half (AUS 31.6 million / USD 24.9 million).

Huon says that Macquarie Harbour is still an important growing region for his aquaculture operations, however, the company remains concerned about the ongoing and cumulative impacts of overstocking of the region in recent years, and anticipates a prolonged period of remediation and recovery will be required.

“Huon’s production from Macquarie Harbour continues to account for approximately 10 percent of our annual harvest,” said Mr Bender. “We will be reducing overall production levels in the region during 2018 and expect that total production volumes will continue to decrease in the Harbour until the area stabilises and returns to more normal environmental conditions.”

As regards yellowtail kingfish farming, which the company has been carrying out experimentally together with the Department of Primary Industries of New South Wales, Huon confirmed that the fish that escaped from one of the cages had an estimated value close to AUD 1.0 million (USD 789,000).

The company said that the incident was not due to the design or integrity of the cages, but rather to operational deficiencies that have been addressed since then. The loss has delayed its plans for the first harvest until the end of March, but the pilot test will continue as planned.

Related article:

- Huon launches protocol to recover escaped yellowtail kingfish

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