August 26, 2010

Australia's Tassal posts decrease in profit

Salmon farming company Tassal Group has reported a 6.9% decrease in annual profit for 2009/10, but expects improved market returns in the 2011 financial year.

Tassal booked a net profit of AUD28.01 million (US$24.62 million) for the year ended June 30, 2010, down from AUD30.01 million (US$26.38) in the prior year, as a significant increase in feed costs and other factors crimped earnings.

Tassal said difficult summer growing conditions had prevented harvested fish from achieving their maximum growth, export sales had generated significantly lower returns and Tassal had spent more on marketing to build its retail presence.

Underlying profit for 2010, which takes into account non-recurring items of AUD1.57 million (US$1.38 million), was AUD29.6 million (US$26.02 million).

Tassal said the last 12 months had been a transitional period as it completed two years of investment in its infrastructure and domestic market sales growth.

"With the ability to better match domestic market demand and supply, Tassal expects to achieve improved domestic market returns for FY2011 and beyond," Tassal said.

"Higher base sales and negotiated price increases, together with targeted marketing and promotional strategies, will improve retail channel returns, while marketing and promotional strategies, together with seasonal pricing, will maximise wholesale channel returns," the company said. "Export returns are also expected to improve due to forecast supply decreases from disease issues in both Chile and Norway."