Fish farming will need to expand strongly to meet demand in future decades, Huon Aquaculture says.
The Tasmanian-based salmon farmer and processor pointed to its history of supply growth at an investor conference in Sydney on Thursday.
“Over its 30-year history, Huon has always grown in line with demand,” deputy chief executive Philip Wiese said in a presentation for the ASX Small and Mid-Cap Conference.
“This long-term focus has seen the business significantly invest in freshwater marine operations and processing over the last four years as part of a significant controlled growth strategy.
“Huon is perfectly poised for security of supply into the future.”
His presentation included a graph sourced from the United Nations Food and Agricultural Organisation predicting capture from wild fisheries would decline out to 2050, while aquaculture would need to expand rapidly to meet demand.
Mr Wiese said 70 per cent of the earth’s surface was water, but just 6 per cent of human protein consumption came from the sea.
He said offshore (as opposed to close to shore) aquaculture was the future, and had been proven by Huon over four years.
Huon’s net profit after tax dropped by 37 per cent to $26.4 million for 2017-18.
Revenue increased by 23 per cent to a record $317.9 million and operating net profit after tax was up 23 per cent to $35.4 million.
Operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 14 per cent to $71.8 million.
“While we anticipate a harvest volume for financial year 2019 of around 20,000 tonnes, below the record level achieved in financial year 2018, stronger pricing is expected to deliver continued growth in operating EBITDA,” Huon said.
“Beyond financial year 2019, we expect Huon to return to production levels in line with the market’s long-term average growth of around 10 per cent.
“This outcome, supported by market expectations that pricing will continue to be underpinned by the shortage of supply over demand, should deliver continued growth in operating EBITDA in financial year 2020.”
Chief executive and managing director Peter Bender said trends pointed to the need for further growth to meet demand.
“With this in mind, we continued to invest for the future in financial year 2018 with our construction of the Whale Point Salmon Nursery and new fortress pens at Storm Bay and will continue to do so in the current financial year,” Mr Bender said in August.
He said Huon was well placed for further sustainable growth.