New Zealand King Salmon Investments Ltd. has signalled potential headwinds for fiscal year 2026. The company’s sea farms are experiencing higher-than-expected mortality rates and slower fish growth, threatening to affect future harvest volumes and profitability.
The prolonged elevated water temperatures have caused significant stress among the fish, leaving them more vulnerable to disease. While the financial outlook for FY25 remains unaffected, FY26 is expected to bring reduced harvest levels and lower EBITDA.
A History of Struggles with Rising Temperatures
New Zealand King Salmon has battled extreme summer temperatures for years, leading to substantial fish mortality. The company posted record losses of NZD 73.2 million (USD 46.2 million, EUR 41.7 million) due to these challenges. This prompted drastic cost-cutting measures, including a staff reduction of around 20 per cent in FY22.
The company reported a net profit of NZD 1.9 million (USD 1.19 million, EUR 1.08 million), reversing its previous losses. However, the recovery came at a cost: sales volumes dropped by 24 per cent, from 7,672 metric tons (MT) in FY22 to 5,837 MT in FY23, while revenue declined by 4 per cent.
They attributed these lower sales to strategic changes in its farming and harvesting practices, designed to mitigate further losses from rising sea temperatures.
Projected Impact on FY26
The company expects future challenges despite some success in stabilising operations. “We needed smarter strategies, with fish health being our number one priority,” Acting CEO Graeme Tregidga stated.
One of the key issues is the continued financial burden of high mortality rates, which increased to NZD 25.9 million (USD 16.3 million, EUR 14.7 million) in FY23, up from NZD 20.6 million (USD 13.0 million, EUR 11.7 million) the previous year.
FY25 financial projections remain intact for now, but looking ahead to FY26, the company foresees reduced harvest volumes and lower profitability.
New Strategies to Reduce Mortalities
New Zealand King Salmon has implemented a series of operational adjustments, focusing on proactive rather than reactive measures to address the ongoing challenges.
“In a supplementary strategy, we implemented a seasonal harvest, whereby we harvest smaller fish as additional volume prior to the summer months,” Chairman John Ryder explained. The strategy was tested at the Ruakaka farm in the Queen Charlotte Sound, resulting in an additional 750 MT of biomass.
This shift has already yielded positive results. Mortality costs have dropped significantly—from NZD 13.5 million (USD 8.5 million, EUR 7.7 million) to just NZD 2 million (USD 1.2 million, EUR 1.1 million) during the most recent summer period. “In a simple but significant move, we decided to avoid the detrimental effect that warmer summer temperatures had on our fish, rather than fight it,” Ryder and Tregidga said.
Additionally, the company is investing in long-term solutions, such as developing vaccines and adjusting farming techniques to better withstand climate-related challenges.
Ryder emphasised the importance of adaptation, stating, “The key lesson in facing adversity is how you react to it. The Board and leadership team have made significant changes to our operations that give us confidence for the future.”
Expansion into Open Ocean Farming
New Zealand King Salmon has secured resource consent for the Blue Endeavour project, an ambitious plan to expand its operations into the open ocean. The initiative aims to counteract temperature-related mortality risks by relocating farming operations to deeper, cooler waters.
While this shift presents logistical and regulatory hurdles, the company remains optimistic about its long-term benefits. “The company’s resource consent application for the Blue Endeavour project… was approved,” Tregidga confirmed, signalling a major step forward for the company’s sustainability efforts.
Conclusion
The challenges New Zealand King Salmon is facing highlight the growing pressures on the aquaculture industry at large. Rising ocean temperatures are forcing fish farmers across the globe to rethink their practices, with a shift toward adaptive strategies like offshore farming becoming increasingly necessary.
New Zealand King Salmon’s commitment to innovation and sustainability remains steadfast. The company is positioning itself for resilience in a volatile climate through investments in new farming techniques and open ocean expansion.