Trading Room home page

Higher local consumption lifts Tassal

Market watch top headlines

Australian reports

World reports

Stocks to watch

LYC, NST, OGC, SHL, WPL,

AAP

February 15 2013, 1:44PM

By Trevor Chappell

MELBOURNE, Feb 15 AAP - Fish farmer Tassal has lifted its first half profit as it pushes more consumers to eat salmon for breakfast, lunch and dinner.

Tassal on Friday booked a net profit of $15.83 million for the six months ended December 31, 2012, up 22.1 per cent on $12.96 million in the prior corresponding period.

Shares in Tassal were 13.5 cents, or 7.87 per cent, higher at $1.85 at 1319 AEDT on Friday.

Tassal said its profit result was driven by growing consumption among domestic consumers and the gradual exit from volatile, less profitable export and contract-growing markets.

Both the volume of fish sold and revenue in the domestic market lifted by more than 20 per cent in the first half while volumes and revenues in the export and contract-growing markets fell sharply.

Overall, Tassal was making more money from fewer fish.

"Our market research indicates we need to increase the frequency of purchase (of salmon)," Tassal chief executive Mark Ryan said during a market briefing on Friday.

"Effectively, people only had two recipes for salmon. They didn't realise you could eat it for breakfast, lunch and dinner and quite possibly in between those different meals."

"They would not think of doing a Thai green salmon curry or putting smoked salmon on a bagel."

Tassal said it has a strong marketing plan and new product initiatives to continue to boost the consumption of salmon among domestic consumers, especially around Easter.

Mr Ryan said salmon was a growth market for retailers, given that the fish was healthy to eat and could be produced sustainably.

Global demand for salmon in the second half of the current financial year was outstripping supply, which was driving up prices.

Mr Ryan also said Tassal's new harvest strategy was providing an optimal-sized fish and maximising survival rates, which had helped reduce the cost-per-kilo of production.

Mr Ryan said Tassal had had the extension of its fish farming facility at Macquarie Harbour in Tasmania's west approved by the state and federal governments, and the number of fish to be stocked there would rise by 700,000, to 2.1 million.

"We'll start stocking those (the extra 700,000 fish) from September/October this year," he said.

"There's no effects of AGD (amoebic gill disease) in Macquarie Harbour so it really is global best practice from a cost-of-growing perspective."

Mr Ryan said that in the second half of the financial year, Tassal was well positioned to grow shareholder value.

"We're going to continue with this domestic-market per capita consumption growth," he said.

"We don't provide profit guidance, but what we're seeing anecdotally is we've got better supply than in previous years due to our new harvest strategy and our selective breeding programs.

"Our second-half pricing environment is forecast to be more favourable."