Strong performance continues in the third quarter
Highlights
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Revenues of £39.4m, driven by higher harvest volumes
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EBIT/kg improved to £0.95, up 36% from Q3 2017
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Annual tonnage target for 2018 revised to 29,500 tonnes
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Awarded two-star Best Aquaculture Practices (BAP) certification to include processing plants
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Strategic acquisition of a hatchery and freshwater site during November 2018
Key financials
| Q3 2018 | Q3 2017 | YTD 2018 | YTD 2017 | FY 2017 | |
| Net operating revenues | 39 360 | 39 031 | 137 636 | 111 050 | 150 946 |
| EBITDA | 8 776 | 6 723 | 46 327 | 30 016 | 38 669 |
| EBIT before fair value adjustments | 6 762 | 4 747 | 39 994 | 23 932 | 30 476 |
| Equity ratio | 68% | 60% | 68% | 60% | 59% |
| NIBD | 18 866 | 35 814 | 18 866 | 35 814 | 38 519 |
| Harvested volume | 7 091 | 6 781 | 22 868 | 18 398 | 25 272 |
| EBIT/kg before fair value adjustments | 0.95 | 0.70 | 1.75 | 1.30 | 1.21 |
Status and outlook
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Revenue for the third quarter 2018 was £39.4m (Q3 2017: £39.0m). Harvest volumes increased 5% to 7,091 tonnes (Q3 2017: 6,781 tonnes), while revenue per kilo decreased to £5.55/kg
(Q3 2017: £5.76 /kg). Revenue per kilo was impacted by lower average harvest weight during the period. -
Costs/kg was £4.31 for the quarter (Q3 2017: £4.76/kg). SSC changed its accounting basis for mortalities from Q1 2018 to be in line with industry standards resulting in 2018 costs being transitionally lower by £0.24/kg year to date. Re-phasing harvests and lower mean weights also impacted on costs during the quarter.
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The underlying demand for Scottish salmon remains strong. Export volumes accounted for 51% of total sales during the period, up from 47% in Q3 2017. SSC continues to develop overseas markets, particularly in North America and the Far East. Exports to markets outside Europe were lower in the third quarter than earlier in 2018 due to smaller harvest sizes.
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Good growth continues in the standing biomass. The annual tonnage target for 2018 is revised to 29,500 tonnes from the previously stated 28,000 tonnes.
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SSC achieved a two-star Best Aquaculture Practice (BAP) certification including marine sites and processing plants.
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SSC continues to develop its operational platform and acquired a hatchery and fresh-water site in the North of Scotland during November 2018 which will increase smolt production capacity by around 1.5 million, further developing its freshwater infrastructure.
CEO comment
Craig Anderson, Chief Executive Officer at The Scottish Salmon Company, said:
"Historically, the third quarter has been the most challenging for The Scottish Salmon Company. However, whilst the third quarter this year has not been without issues, on balance it was a solid quarter. Overall biological performance has been good and we are increasing our harvest volume guidance for the full year to 29,500 tonnes."