Reduced Fish Growth Forces NZ King Salmon to Lower FY26 Earnings Guidance
New Zealand King Salmon has lowered its FY26 harvest volume and earnings guidance due to slower fish growth linked to subdued feed outs during warmer months. The company aims to rebuild biomass and improve future harvests with new strategies.
- FY26 harvest volume revised down to ~5,200-5,400 MT from 5,900-6,300 MT
- Pro-forma EBITDA guidance cut to $6-$12 million from $15-$24 million
- Harvest reduction intended to rebuild biomass and support future growth
- New summer diet trial shows promising results for fish health and growth
- Harvest volumes expected to recover by September 2025
Harvest Volume Reduction and Earnings Impact
New Zealand King Salmon Investments Limited (NZK) has announced a significant revision to its FY26 harvest volume and earnings guidance. The company now expects to harvest between approximately 5,200 and 5,400 metric tonnes, down from the previous forecast range of 5,900 to 6,300 metric tonnes. This adjustment has led to a downward revision of pro-forma EBITDA guidance to between $6 million and $12 million, compared to the earlier range of $15 million to $24 million.
Reasons Behind the Reduced Harvest
The Board’s decision to reduce harvest volumes stems from a need to rebuild biomass after a period of slower-than-expected fish growth. The primary factor contributing to this slowdown has been subdued feed outs, which remained below forecast levels for longer than anticipated, particularly during the warmer months. Warmer water conditions can increase stress on the fish, suppressing appetite and growth rates, which in turn affects overall biomass.
Strategic Response and Future Outlook
To mitigate the impact on future harvests, NZK is proactively reducing current harvest volumes to allow fish populations to grow larger and healthier. The company expects harvest volumes to begin recovering by September 2025. Additionally, NZK is implementing a new summer diet trialed in its Ruakākā trial pens, which has demonstrated improved feed intake, growth, and survival rates compared to the existing diet. This innovation aims to support fish health and performance during challenging warmer periods.
Operational and Customer Implications
The reduction in harvest volumes will have operational impacts and affect customer supply, which NZK is currently addressing. While the company is confident that these measures will contain the profitability impact within FY26, the longer-term effects on earnings beyond this period remain to be seen. NZK’s ongoing development of tools and strategies to enhance fish health underscores its commitment to sustainable growth and operational resilience.
Bottom Line?
NZ King Salmon’s harvest cut is a strategic pause to safeguard future growth, but investors will watch closely for recovery signs.
Questions in the middle?
- How effective will the new summer diet be in sustaining fish growth during future warm periods?
- What are the potential long-term impacts on profitability beyond FY26 due to reduced harvest volumes?
- How will operational changes affect customer relationships and supply chain stability?
