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Trading Conditions Remain Challenging for Scottish Samon Company

Salmonids Post-harvest +1 more

SCOTLAND, UK - The Scottish Salmon Company reported net operating revenue for the second quarter of 2012 of 17.5m (31.7m) achieved on sales volume of 5,290 tonnes (7,582 tonnes). For the half year net operating revenue was 30.1m (57.1m) on sales volume of 9,002 tonnes (13,536 tonnes).

SSC enjoyed a positive April and May, but the company's trading was influenced by further downward pressure on traded fish prices during June. This was caused by increased volume on the traded fish market due to a stark rise in short-term harvesting from competing production areas. This pressure on traded fish is forecast to continue through the first half of Q3. Pressure also continued on feed and fish meal prices with a resultant detrimental effect on overall cost.

EBITDA before fair value adjustment on biomass for Q2 was 2.1m (10.0m). EBIT before fair value adjustment on biomass for Q2 was 0.3m (8.4m).

In light of the production imbalance across the company's operation affecting the tonnage of salmon harvested in the first half of 2012, SSC continues to plan to grow volume and achieve consistent supply, both through the year and year-on-year. The company's main strategic objective is to increase harvest volumes in the low periods in order to maximise cost utilisation and for long term sustainable growth.

Planning permission and full licence was granted for a new farming facility in Loch Torridon on the Northwest coast of Scotland during Q2. There will be a smolt input in Q4 2012 which will deliver 2,500 - 3,000 tonnes of additional production in 2014. The development is part of the company's five-year growth strategy, which aims to increase production levels to 40,000 tonnes annually.

A new harvesting station was opened at Arnish on the Isle of Lewis near the Marybank processing facility, which will have a positive impact on the underlying cost base in the second half of 2012 as the majority of harvest volumes are in the Hebrides.

Stewart McLelland, CEO of The Scottish Salmon Company said: "The past quarter and first half of 2012 reflect the underlying challenges to the business due to the unbalanced harvest profile which is further exaggerated by the current downturn in traded fish prices. Nevertheless the Company remains committed to developments and is encouraged by the granting of consents for one new production site at Loch Torridon.

"Our expectation is that 2012 will continue to be a challenging year for the salmon market, however, we remain focused on the long term. We continue to build positively for the future and remain confident in our growth plans to produce around 40,000 tonnes of salmon per year by 2016."