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Tuesday 28 June 2022

NZ King Salmon, Scales upgrade guidance, Delegat sanguine on FY22

8th December 2021 By Staff Reporter | | @foodtickernz

New Zealand King Salmon and Scales have upgraded their earnings forecasts citing improving conditions and strong ingredients performance respectively.

NZ King Salmon says it is seeing improved fish size in its current stock.

NZ King Salmon said in a market update today that it had revised its previous forecast of proforma EBITDA from the $8m to $10m range to now $10.5m to $12.5m.  

“Although trading conditions remain challenging with elevated freight costs, inflationary pressure on raw materials and Covid restrictions impacting food services, we have seen a sustained gain in our financial performance,” the company said. 

“As previously noted, we continue to see an improvement in fish size, due to the change to our farming model.”

It also noted that the consent hearing for its Blue Endeavour open ocean farm application was nearing completion with the last day expected to be 21 December.

Diversified agribusiness Scales said in a market update today that its underlying net profit was now expected to be at the upper end of the previously advised range of $32m to $37m for the year to December 2021.

The company said this was mainly due to the “continued strong performance” of its Food Ingredients division. 

“We have also continued our dual focus on stabilising margins in Mr Apple and the wide-ranging growth initiatives within Food Ingredients,” said managing director Andy Borland.

“At Mr Apple, the latest phase of orchard redevelopment, predominantly into the Dazzle variety, was completed, and the new cool store adjacent to the Whakatu packhouse was fully operational. The multi-year automation project also commenced. 

“For Food Ingredients, a number of initiatives to further extend our range of services and products are being pursued.”

Borland added that selling prices within its horticultural division were forecast to be consistent with 2021 but the group would incur “further significant shipping cost increases” for 2022.

Winemaker Delegat Group said at its AGM on Tuesday that its operating net profit for the year to June 2022 would be in the $57m to $61m range, down from FY21’s $65.5m. 

“The forecast operating net profit after tax is lower than this year’s result due to the impact of the lower yielding 2021 vintage and higher grape prices resulting in an increased cost of goods per case, unfavourable exchange rate movements, higher freight costs, and the recurrence of operating expenses suspended due to Covid-19 restrictions,” said Delegat’s acting managing director, Graeme Lord. 

“The group will continue to closely monitor and manage the potential impact of ongoing supply chain disruption and cost inflation, noting that these factors present some risk to the achievement of forecast sales and profit in 2022.”

The company said it was on track to grow sales by 8% to 3.42 million cases during the current fiscal year. It wanted to grow sales by 25% to 3.98 million cases over the next three years with the primary driver being Oyster Bay in North America.

Delegat added that it aimed to establish Oyster Bay and Barossa Valley Estate as leading brands in the ‘super premium’ wine category globally. 

It also said it refinanced $333m of debt with its incumbent panel of four banks – Westpac, BNZ, HSBC and China Construction Bank NZ.

“We have taken the opportunity to secure three to five-year expiring facilities at competitive new margins and Delegat Group is pleased to extend its relationship with all four syndicate banks,” the company said. 

“This renewal achieves a weighted average term to expiry of 4.0 years across the bank facilities.” 



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