Jellyfish harming salmon stung profitability and production for Tasmanian-based Huon Aquaculture.
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A "bloom" of moon jellyfish took place in the Huon River and D'Entrecasteaux Channel in November and December and led to fish deaths, Huon said.
It said salmon which came into contact with jellyfish stings or mucus were in danger of poisoning.
"The key mitigation strategy is to keep jellyfish away from the fish, for example, towing the pens slowly through the water, allowing the jellyfish to be pushed out through the nets," Huon said in its results report for the first half of the financial year.
It said that was done successfully, but reported labour and operational costs from mitigation, plus fish deaths and lost growth.
Huon said the direct threat was over.
However, some fish had developed gill necrosis due to damage from the jellyfish.
"It has led to reduced survivability and growth during January and February," Huon said.
It said cooler water would quickly restore gill health.
Huon's revenue for the half came in at $136.3 million, which was 20 per cent down on the corresponding period a year earlier.
Huon said that was because of a fall in production volume.
Operating net profit after tax slumped by 53 per cent, from $19 million to $8.9 million.
Statutory net profit after tax fell by just 4 per cent, to $26.4 million, aided by a strong recovery in the fair value adjustment of biological assets.
Tonnage fell by 29 per cent.
Huon said that was "due to the impact on the biomass from the temperature spike in November 2017 and extended warm summer".
It said a strong pricing environment was not enough to offset the drop in volumes.
Huon said domestic pricing remained robust, "driven by a shortage in supply and growth in demand".
The average domestic price had risen steadily in the last 18 months, especially in the wholesale market.
Huon said a two-year, $160 million expansion investment program would be completed in the current financial year.
"The increase in biological assets in financial year 2019-20 and 2020-21, together with a favourable pricing environment, will underpin increased revenue, a decrease in operating costs and a return to growth in operating earnings," the report said.
It said the domestic market was expected to continue growing at about 10 per cent per year.
Domestic production was expected to fall short of demand in 2018-19 and 2019-20.
World demand was growing at 6-7 per cent per year.
International prices were forecast to remain high.