THE SCOTTISH Salmon Company has recorded a £12.7 million loss for the third quarter after the historically low quarter was additionally impacted by sub-optimal harvest weights and “unprecedented levels of mortality”.

The Edinburgh-based company, which operates 50 freshwater and marine sites across the west coast of Scotland, grew revenue by almost 40 per cent, to £25.1m, compared to the same quarter in 2015, thanks to an increase in market prices, but last year’s Q3 brought a £716,000 profit.

Price per kilo has increased to £4.58 from £3.50 in the same quarter last year as a result of strong demand. And, referring to Q4 price forecasts of 60 Norwegian Krone per kilogram (£5.68), the company said the market remained strong, with a positive outlook over the next 24 months.

Loading article content

Harvest volume was up to 5.5 million tonnes from 5.1 million in the third quarter of 2015, but year-to-date volume is down on 2015 as a result of what the company called “continued industry wide biological challenges”.

Operating costs for the quarter were up 37 per cent to £26.6m an increase driven almost entirely by 1,300 tonnes of mortalities, which the company said would impact future as well as current harvest volumes, although it has a policy of recognising the cost of all mortalities in the quarter in which they occur.

This resulted in a loss of £620 per kilogram before interest and tax, slightly narrowed from £670 per kilogram last year. Year to date, earnings per kilogram is £90.

The company added however, that it expected harvest volumes for 2017 to be in line with 2016 as the impact of the current challenges unwinds.

Craig Anderson, managing director at The Scottish Salmon Company, said: “We have taken a number of immediate practical measures to tackle the current challenges and have made a significant investment to introduce cleaner fish as a natural and sustainable complement to conventional sea lice management.

SSC also reported that its new site at Maragay Mor has been commissioned and will contribute an additional 2,000 tonnes, while work is progressing well at a new harvest station in the southern region. Further investments have been made in the purchase of three new boats to service its southern sites. “Alongside our new well-boat contract, these investments are a core element of our long term strategy,” said the company.

Noting that the company’s provenance continued to remain its key selling point across the world, SSC reported that overseas sales represented 42 per cent of output in the quarter as it focuses on developing its flagship export range, Label Rouge range.

“While we will be monitoring progress on Brexit negotiations with the EU closely, we are a global business and trade with numerous partners beyond Europe,” it said.

Year to date, the company’s sales have passed £80m and profits remain at £8m in spite of the Q3 loss.

“The market remains strong with a positive outlook over the next 24 months and we continue to focus on sustainable business development,” said Mr Anderson.