Scottish Salmon Company: 2011, a year of contrasts –

Scottish Salmon Company: 2011, a year of contrasts Published:  24 February, 2012

2011 a year of contrasts for The Scottish Salmon Company as it confirms £40m investment plans.

HIGHLIGHTS [Unaudited year-end accounts]

* Net operating revenues £90.2m (2010: £92.4m)* EBIT before biomass adjustment for the full year was £14.4m achieved on volume of 22,962 tonnes* Strategic plan and funding in place with aim of securing balanced production – with imbalance evident in Q3 and Q4* Increased global supply resulting in a reduction in the trading price of salmon

Year-end figures released today (24 February 2012) for The Scottish Salmon Company show a “game of two halves”.

In the first halve of the year, The Scottish Salmon Company (SSC) recorded an improved performance across revenues and profitability. As anticipated, however, in Q3 and subsequently in Q4, lower volumes brought about by the imbalance in stocking cycles across the company’s geographically diverse sites have had a negative impact on unit production costs.

Nonetheless, year-to-date, the Company nearly matched 2010 in terms of turnover and met volume targets. Whilst year on year profitability has decreased this is also against a backdrop of higher feed prices and the world wide decrease in salmon prices due to increased supply.

The year to 31 December 2011 ended with turnover at £90.2m (2010, £92.4m), while trading profit (before interest and tax), was recorded at £14.4m (2010: £22.5m). Overall sales volumes of 22,962 tonnes met 2011 targets, and were, as expected, slightly down on 2010 (24,516 tonnes).

However,  the challenges experienced in Q3 and Q4, are short term, and while demand for premium Scottish salmon globally remains strong, the long term outlook is positive as the domestic market grows and  new markets open up.

CEO, Dr Stewart McLelland, says the results also underpin the Company’s plans to invest over £40m in new and existing sites to overcome the production imbalance. The fully funded investment strategy which is now in place will secure consistent year-on-year production and is expected to generate up to 100 additional jobs across the West Coast of Scotland and create significant synergies in the harvesting and processing operations.

He says: “The year started at record levels, but the decrease in volumes in the third and fourth quarters, while anticipated, clearly demonstrate how vital it is to establish a balanced year-on-year production process. 2011 was a game of two halves illustrating both the company’s potential and the challenges of working below full production capacity.

“Our long term plans are to grow the business sustainably and we are investing locally to achieve the extra volumes needed to create the necessary synergies in the production process.”

He added: “The demand for premium Scottish salmon globally remains strong and the long term outlook is extremely positive as we open up new markets. Short term price fluctuations impact financial performance but The Scottish Salmon Company is well placed to withstand these pressures as we continue to innovate and build environmental excellence into all our operations.”