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King Salmon to get $1.8m earnings boost

NZ Newswire logoNZ Newswire 30/04/2017 Paul McBeth

New Zealand King Salmon Investments will get a $1.8 million boost to annual profit after reaching a deal with a supplier over extra costs the fishing farmer had worn on its books in earlier years.

The Nelson-based company will get a cash payment this month which will give a one-off lift to profit after reaching a deal with a key supplier in regards to additional costs incurred and absorbed in the current and prior financial years, managing director Grant Rosewarne said in a statement.

King Salmon noted a contingency in its half-year result that it had an unresolved dispute "with a feed supplier regarding a feed quality issue".

In March, the company posted a 52 per cent gain in first-half profit to $8.7m and said it was on track to meet prospectus guidance for a profit of $10m on revenue of $130.1m in the year ending June 30, 2017.

On Monday, King Salmon said its fish performance metrics in the peak summer period were in line with overall expectations.

The shares last traded at $1.32, up from their $1.12 listing price in an initial public offering last October. King Salmon raised $70m of which $30m went to repay debt and fund future investment, with the rest paying existing shareholders who sold down their holdings.

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