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Salmon farmer reveals return to profitability

SHETLAND'S biggest farmed salmon producer has returned to the black, a year after disease contributed to a multi-million pound loss.

Grieg Seafood Hjaltland, which operates 30 sites on Shetland, has booked pre-tax profits of £148,161 for the year ended December 31.

The company moved back into profit 12 months after the out-break of Amoebic Gill Disease (AGD) wiped out millions of pounds worth of stock, accounts newly-filed at Companies House reveal.

The disease, blamed by some on higher than usual warm water temperatures, contributed to pre-tax losses of £14.9m million in the year ended December 31, 2012.

A write-down in the value of fish stock was booked as an exceptional item of £7.4m in those accounts.

In its latest financial year the firm, which farms a third of the salmon grown on the islands, processing about 60 per cent, saw turnover rise to £60.4 million, from £59.9m in 2012.

A breakdown of turnover and profit by class of business and geographical markets was not provided.

Writing in the accounts, the directors note the firm had started 2013 in a "challenging position", as the effects of AGD had meant early harvesting in 2012 and, as a result, fewer volumes coming to market at the start of the year.

"However, as the year went on, prices improved and the cost of production decreased, resulting in a gross profit of 16% being made in the year," the directors state.

"The turnaround that was initiated by management at the start of the year considerably improved the biological situation and greatly improved profitability.

"Further initiatives have been identified and are being implemented in order to improve production and reduce costs in Shetland going forward."

The accounts show the group, whose four business functions trade as Hjaltland Hatcheries, Hjaltland Seafarms, Lerwick Fish Traders and Shetland Products, employed an average of 211 staff over the year, up from 206. There was a spike in overall staff costs, which came in at £6.47m, com-pared with £5.9m in 2012, and directors' pay rose to £181,333 from £123,000.

The directors expressed confident about the group's future trading prospects, stating: "The strong market that characterised the end of 2013 has continued in 2014 and the market is expected to remain strong for the period ahead.

"Given the current strong forecasts for 2015, the prospects for market balanced supply and demand in the current year are also good.

"The group's strategic priority in the year ahead will be to complete the ongoing turnaround in the Grieg Seafood Hjaltland UK group's results."

The prospect of future growth in the Scottish aquaculture sector was highlighted by a report last week, which said the industry could create a further 400 jobs by the end of the decade if targets are met.

The study, commissioned by Marine Scotland and Highlands and Islands Enterprise (HIE) found that, when adding in supply chain activities, the number of posts supported by the industry is expected to rise to nearly 8000 by 2020 from 4500 recorded in 2012.

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