New Zealand King Salmon's Mixed Financial Performance in 1H 2024
NZK (NZK) Share Update September 2024 Monday 23rd
New Zealand King Salmon Reports Mixed Financial Results for First Half of 2024
New Zealand King Salmon Investments Limited (NZX: NZK) has released its interim consolidated financial statements for the six months ended 31 July 2024, showing mixed results in revenue growth and profitability.
Instant Summary:
- Revenue increased to $101.7 million, up from $91.6 million in the same period last year.
- Gross profit decreased to $24.6 million, down from $27.1 million.
- Net profit after tax fell to $6.0 million, compared to $10.6 million in the previous year.
- Earnings per share dropped to $0.01 from $0.02.
- Total comprehensive income decreased to $3.2 million from $6.3 million.
Financial Performance Overview
New Zealand King Salmon Investments Limited reported a notable increase in revenue for the first half of 2024, reaching $101.7 million, up from $91.6 million in the same period last year. This growth is attributed to higher sales volumes and improved market penetration.
However, the company experienced a decline in gross profit, which fell to $24.6 million from $27.1 million. This was primarily due to increased costs of goods sold, which rose to $100.5 million from $84.4 million. Freight costs also slightly decreased to $10.6 million from $11.2 million.
Profitability and Earnings
Despite the revenue growth, New Zealand King Salmon's net profit after tax dropped significantly to $6.0 million, compared to $10.6 million in the previous year. The decline in net profit is largely due to higher corporate expenses and a decrease in other income.
The company's earnings per share also saw a decline, falling to $0.01 from $0.02. Total comprehensive income for the period was $3.2 million, down from $6.3 million, reflecting the challenges faced by the company in maintaining profitability amidst rising costs.
Balance Sheet and Cash Flow
As of 31 July 2024, New Zealand King Salmon's total assets stood at $241.4 million, slightly up from $238.9 million at the beginning of the year. The company's cash and cash equivalents increased to $28.3 million from $20.9 million, indicating strong cash flow management.
The company's total liabilities decreased marginally to $47.8 million from $48.7 million, resulting in net assets of $193.6 million, up from $190.3 million. The company maintained its focus on reducing debt, with total borrowings standing at $3.1 million, down from $5.4 million.
The mixed financial results are likely to have a moderate impact on New Zealand King Salmon's stock price. While the revenue growth is a positive sign, the decline in profitability and earnings per share may concern investors. The company's ability to manage costs and improve profit margins will be crucial in maintaining investor confidence.
Investor Reaction:
Analysts are expected to have a mixed reaction to the financial results. While the revenue growth is encouraging, the decline in net profit and earnings per share may raise concerns about the company's cost management and overall profitability. Investors will be closely watching the company's strategic initiatives to address these challenges.
Conclusion:
Investors should keep an eye on New Zealand King Salmon's efforts to improve profitability and manage costs. The company's strong revenue growth is a positive indicator, but addressing the decline in net profit will be key to sustaining investor confidence. Subscribe to our newsletter for regular updates on New Zealand King Salmon and other stock market news.