Health issues hit SSC growth hopes
THE Scottish Salmon Company said biological challenges and mortalities contributed to a drop in harvest volumes and a rise in operating costs in its final quarter of 2016.
Strong market prices resulted in year on year growth, with revenue reaching £110.0 million for the year, compared to £100.4 million in 2015, but the company reported an average EBIT/kg of £-0.17.
Revenues for the quarter were £27.2 million (Q4 2015: £23.9 million) on harvested volumes of 5,733 tonnes (Q4 2015: 6,059 tonnes).
Operating costs rose by 15 per cent, from £22.7 million to £26 million in the fourth quarter, said the SSC in its Q4 report, published today.
Throughout Q4 the company focused on increasing capacity and improving operational efficiency. Trials on its new harvest station in Ardyne, Argyll, were completed during the quarter and the facility became fully operational in January, along with the company’s new well boat, the Ronja Supporter.
Both of these investments will allow greater capacity and flexibility when harvesting and improve speed to market, said the SSC.
The 1,800-tonne well boat, leased from Solvtrans, is almost double the size of its sister ship, the Ronja Viking, which is used in the SSC’s farms in the Hebrides.
The SSC consolidated a number of smaller farms in the north region into a single 3,400 tonne operating site, to improve efficiencies and economies of scale.
Export sales accounted for 44 per cent of output, an increase of seven per cent, as the SSC continued to target overseas markets with its Label Rouge line and Native Hebridean Salmon.
CEO Craig Anderson said: ‘We continue to make good progress in delivering our strategy for long term sustainable growth.
‘Performance has remained stable but we recognise that the effects of recent health issues have impacted on our projected growth in the short term.
‘Taking into account the consequences of the current biological challenges, we are now guiding harvest volumes of 25,000 tonnes volumes for 2017.
‘We experienced a notable increase in sales over the festive period, demonstrating the continuing demand at home and overseas for Scottish salmon as a premium food product.
‘New site development is an integral part of our growth strategy and continues to be a key focus.’