However, the company was unable to take full advantage of the superior spot prices as a result of previously contracted sales.
Revenues in the quarter were up on Q3, at £21.5 million (Q4 2012 £27.8 million), resulting in £82.4 million for the year (2012 £79.5 million).
Q4 volumes were 3,065 tonnes below Q4 2012 and by a similar amount year on year. This shortfall arose due to an imbalance due to site configuration and the farming cycle and the following factors:
- the impact on harvesting following AGD which affected juvenile fish in 2012
- ongoing mortality issues at two sites in Gigha which particularly affected Q4 results
- lower harvesting volumes due to poor weather in December 2013
Production costs were higher than planned as a result of the factors mentioned above, although were an improvement on Q3.
The company’s EBIT before Biomass Fair Value Adjustment and exceptional items for 2013 rose to £3.3 million from £0.5 million in 2012.
The planned contracted levels at 60 per cent for 2014 provides opportunities to take advantage of
the expected strong market by securing contract sales at significantly higher prices than 2013.
Outlook
The drive for production balance is ongoing and site optimisation plans are in place. New consents have been secured for a new farm on the Western Isles and an extension of an existing farm on Skye, adding an additional 3,200 tonnes of consent. These will both be equipped and stocked in 2014.
The Hebridean strain of salmon will continue to be developed. Investments have been made through the purchase of the assets of a hatchery renamed Langass Hatchery, in the Western Isles.
The Company’s Label Rouge credentials offer entry into the niche French market and provide a strong platform upon which to build. The Company’s position as ‘Authentically Scottish’ with the aim to maximise opportunities that exist for premium Scottish salmon will continue.
Contracted volume is an area that has been reviewed going into 2014 to ensure that SSC maximises its sales revenues, whilst maintaining a consistent revenue stream.
The provenance of our salmon, where it comes from, our feed regime and our husbandry, is core to the development of our strategy for Scottish salmon. Production of high end, premium quality, sustainable salmon, rich in Omega-3 and farmed responsibly, is fundamental to our business. The focus is to develop value through innovative practices and develop distribution channels and new market opportunities.
