NZK FY18 Interim Report

INTERIM FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

DIRECTORS’ REPORT .....................................................................5
CORPORATE INFORMATION ............................................................8
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ....................10
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ...........................11
AS AT 31 DECEMBER 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ...........................12
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
CONSOLIDATED STATEMENT OF CASH FLOWS .....................................13
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ........................14
REVIEW REPORT .........................................................................22
CONTENTS
INTERIM FINANCIAL REPORT
3

“We firmly believe we
are contributing to a
sustainable food future
for New Zealand with our
vision for best-practice
salmon farming.”
Grant Rosewarne,
Managing Director & CEO
NEW ZEALAND KING SALMON
4

DIRECTORS’ REPORT
The New Zealand King Salmon Board is
delighted to announce a record first-half
profit result for the six-month period to 31
December 2017 (1H18). Strong global demand
continues to underpin our growth.
This report marks the halfway point in our
second year as a public company, and we
remain committed to greater transparency,
stakeholder engagement and value creation.
We firmly believe we are contributing to a
sustainable food future for New Zealand with
our vision for best-practice salmon farming.
FINANCIAL PERFORMANCE
For the six-month period ending 31 December 2017, New
Zealand King Salmon has recorded a net profit after tax of
$15.7 million, which is up 81% on the comparable six-month
period to 31 December 2016 (1H17). The Pro Forma Operating
EBITDA is $19.5 million, marking a 169% increase on what was
recorded in 1H17.
The excellent 1H18 results can be attributed to a significant
boost in volume and increasing global demand for our salmon.
Favourable growing conditions during the FY2017 year allowed
us to deliver additional volume to satisfy that demand. 4,392
metric tonnes of gilled and gutted salmon were sold during this
financial period, up 29% on 1H17.
The Company also made significant gains in the average selling
price of our salmon, as branding penetration increased, mainly
due to Ōra King sales rising 22% on the six month period to
30 June 2017.
New Zealand King Salmon is pleased to advise that a fully
imputed final dividend of 2.0 cents per share has been declared
and will be paid on 23 March 2018.
BUSINESS UPDATE
During this period, we saw a pleasing improvement in Health,
Safety and Wellness metrics with the Lost Time Injury Frequency
Ratio (LTIFR) down to 11.4 at 31 December 2017 (compared with
24.1 at December 2016).
Sales & Marketing Developments
Business development in new channels overseas has progressed
over this period with several new retail customers poised to
launch smoked salmon ranges in North America and Asia. Ōra
King sales continue to lead growth, particularly in North America
with total sales of 1,158 MT, up 70% on 1H17.
John Ryder
CHAIRMAN
Grant Rosewarne
MANAGING
DIRECTOR & CEO
INTERIM FINANCIAL REPORT
5

Production Developments
Harvest volumes increased by 30% on 1H17 to 4,424 MT, with
good survival and growth during the FY2017 summer allowing
additional harvest and thus sales. Our feed conversion ratio
at 1.74x was a slight improvement on the previous first half
year of 1.76x, however mortality rates were higher than 1H17 as
New Zealand entered one of its warmest summers on record.
Diet and fish performance remain key areas of focus for our
aquaculture team.
Mortality is expected to be significantly higher in FY2018 than
FY2017 due to the extraordinarily hot summer. We continue
to work on solutions to address the risk of rising seawater
temperatures – in addition to a strong focus on fish husbandry
and animal welfare, this year we have actively managed
stocking density on some farms. We see opportunities to
improve future survival rates for our fish via preventative
immunisation in the hatchery, and specifically targeting
robustness in our selective breeding program.
Farm Relocation
The Ministry for Primary Industries’ proposal to relocate up to six
salmon farms to deeper locations with better water flow (‘high-
flow sites’) in the Marlborough Sounds is set to advance to the
next stage with the February 2018 release of the Marlborough
Salmon Farm Relocation Advisory Panel recommendations for
Government to consider.
We are delighted that the report supports the growing
recognition that aquaculture plays a key role in sustainably
feeding our planet. Salmon is rightly considered the most
We also launched Ōra King TYEE, a pioneering new aquaculture
discovery. The unique characteristics of our breed enable
us to grow these rare salmon to over 13 kilograms - delivering
our customers an even more luxurious, yet sustainable,
sushi experience.
At home, the nationwide advertising campaign featuring Reg
the Seal and chef Al Brown, coupled with new product launches
of the Regal Manuka Smoked range and an extended Omega
Plus range, positioned us well for future sales of our premium
branded retail products in New Zealand.
Overall, the weighted average NZ$ / kg sale price was $20.00,
up from $18.70 in 1H17 and the FY2018 Prospective Financial
Information of $19.20. Strong demand globally as well as
market and product mix adjustments have allowed us to
improve overall pricing.
“Salmon is rightly considered
the most sustainable of farmed
animal proteins for its minimal
space utilisation, feed efficiency,
low carbon footprint, and its
ability to work harmoniously
with the natural nitrogen cycle.”
Grant Rosewarne, Managing Director & CEO
NEW ZEALAND KING SALMON
6

John Ryder
CHAIRMAN
Grant Rosewarne
MANAGING DIRECTOR & CEO
sustainable of farmed animal proteins for its minimal space
utilisation, feed efficiency, low carbon footprint, and its ability
to work harmoniously with the natural nitrogen cycle. Add in
the benefits of high yield, an abundance of healthy Omega 3’s,
traceability and a great tasting product, and it’s easy to see
that this recognition is justified.
The Panel’s report endorses the scientific rationale that higher
flow sites are most suitable, and that our existing low-flow
salmon farms can and should be relocated.
Specifically, the Panel acknowledged the ‘distinct environmental
advantages’ for benthic (sea bed) health as a result of
relocation, alongside ’minor or less than minor’ effects on the
local king shag species and the wider water column. We can
see that a positive decision by the Government would
contribute to even better environmental, social and economic
outcomes for our region. This proposal aligns very well with our
new government’s vision for swimmable waters, green jobs and
strong regional development.
We will continue to focus on improving our existing water space
and obtaining the best water space to enable us to help meet
the very strong demand we are seeing globally for our branded
premium products.
OUTLOOK
Despite our record-breaking 1H18 results, the extraordinarily hot
summer has impacted the survival rates of our King salmon,
and this is a principal factor behind anticipated lower profits for
the second half of FY2018.
Our aquaculture team has been actively preparing the farms
in anticipation of the warmer summer months, however this
year the water temperatures have been well above average.
Our recently-commissioned higher-flow sites have lessened the
impact of the sustained heat, although, like many other farmers
on land and in the sea, we have had associated performance
and survival challenges. As a result, sales volumes will be
impacted during the second half of this financial year and into
the 2019 financial year. We will report in more detail once the
summer period is over, as we did last year, including an update
on our progress towards a long-term solution to combat the risk
of increasing sea temperatures.
The Company remains in a strong financial position with a
positive net cash position as at 31 December 2017, and we are
excited about the longer-term prospects for our Company.
The Board would like to take this opportunity to acknowledge
the contribution of our team to New Zealand King Salmon’s
record-breaking financial results. We are certainly progressing
well in “Creating the Ultimate Salmon Experience”!
Ngamahau Farm
INTERIM FINANCIAL REPORT
7

BOARD OF DIRECTORS
Director Position Appointment Date
John William Dudley Ryder Independent Non-Executive Chairman 21 September 2016
Grantley Bruce Rosewarne Chief Executive Officer and Managing Director 21 September 2016
Mark Robert Hutton Independent Non-Executive Director 21 September 2016
Jack Lee Porus Non-Executive Director 7 November 2017
Paul James Steere Independent Non-Executive Director 7 November 2017
Thomas Chai Leng Song Non-Executive Director 21 September 2016
Xin Wang Non-Executive Director 7 November 2017
CORPORATE INFORMATION
REGISTERED OFFICE
93 Beatty Street
Annesbrook
Nelson
New Zealand
PRINCIPLE PLACE
OF BUSINESS
93 Beatty Street
Annesbrook
Nelson
New Zealand
BANKERS
The Bank of New Zealand
81 Riccarton Road
Christchurch
New Zealand
SOLICITORS
Chapman Tripp
Level 35
23 Albert Street
Auckland
New Zealand
AUDITORS
Ernst & Young (EY)
Level 4/93
Cambridge Terrace
Christchurch
New Zealand
NEW ZEALAND KING SALMON
8

INTERIM
FINANCIAL
STATEMENTS
FOR THE SIX MONTHS
ENDED 31 DECEMBER 2017
The wasabi patch at
Takaka Hatchery

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
UNAUDITEDUNAUDITED
31 Dec 201731 Dec 2016
Note$000$000
Revenue487,688 63,626
Cost of goods sold(76,244) (59,239)
Fair value gain on biological transformation31,204 28,722
Freight costs to market(8,222) (6,077)
Gross profit34,426 27,032
Other income1,500 738
Sales, marketing and advertising expenses(5,863) (4,012)
Distribution overheads(1,593) (1,436)
Corporate expenses(4,048) (3,513)
Other expenses(112) (2,621)
Earnings before interest, tax, depreciation and amortisation24,310 16,188
Depreciation and amortisation expense(2,419) (2,106)
Finance income88 86
Finance expenses(425) (1,572)
Profit before tax21,554 12,596
Income tax expense(5,819) (3,891)
Net profit after tax15,735 8,705
Other comprehensive income
Other comprehensive income to be reclassified to profit or loss in
subsequent periods (net of tax):
Exchange differences on translation of foreign operations87 (28)
Net movement on cash flow hedges1,032 1,813
Other comprehensive income to be reclassified to profit or loss in
subsequent periods (net of tax):
Share based payment expense121 41
Net other comprehensive income1,240 1,826
Total comprehensive income16,975 10,531
UNAUDITEDUNAUDITED
Earnings per share31 Dec 201731 Dec 2016
Basic earnings per share5 $0.11 $0.07
Diluted earnings per share5 $0.11 $0.07
The above interim consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
NEW ZEALAND KING SALMON
10

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
UNAUDITEDAUDITED
31 Dec 201730 Jun 2017
ASSETSNote$000$000
Current assets
Cash and cash equivalents15,529 10,647
Trade and other receivables19,299 11,688
Inventories618,522 16,674
Biological assets774,454 68,556
Non-current assets held for sale421 421
Other financial assets121 -
Derivative financial assets92,182 2,066
Total current assets130,408 110,052
Non-current assets
Property, plant and equipment38,671 35,726
Biological assets79,126 10,960
Derivative financial assets94,032 3,196
Deferred tax asset1,761 1,636
Intangible assets3,598 3,687
Goodwill39,255 39,255
Total non-current assets96,443 94,460
TOTAL ASSETS226,851 204,512
LIABILITIES
Current liabilities
Trade and other payables18,790 13,282
Employee benefits2,974 3,028
Borrowings81,513 414
Other financial liabilities1246 18
Derivative financial liabilities9906 1,277
Taxation payable4,240 2,285
Total current liabilities28,469 20,304
Non-current liabilities
Employee benefits464 451
Borrowings810,016 10,124
Deferred tax liabilities15,621 14,010
Derivative financial liabilities9827 948
Total non-current liabilities26,928 25,533
TOTAL LIABILITIES55,397 45,837
NET ASSETS171,454 158,675
EQUITY
Share capital11122,574 122,518
Reserves3,035 1,795
Retained earnings45,845 34,362
TOTAL EQUITY171,454 158,675
Net tangible assets per share
Net tangible assets per share $1.31 $1.15
For and on behalf of the Board, who authorised the issue of these financial statements on 28 February 2018.
The above interim consolidated statement of financial position should be read in conjunction with the accompanying notes.
DIRECTOR
28 February 2018
DIRECTOR
28 February 2018
INTERIM FINANCIAL REPORT
11

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
Share
Capital
Foreign
Currency
Translation
Reserve
Hedge
Reserve
Share
Based
Payment
Reserve
Retained
Earnings
Total
Equity
UNAUDITED$000$000$000$000$000$000
Balance as at 1 July 2017122,518 (515) 2,168 142 34,362 158,675
Profit for the period- - - - 15,735 15,735
Other comprehensive income/(loss)- 87 1,032 121 - 1,240
Total comprehensive income/(loss) for the period- 87 1,032 121 15,735 16,975
Dividend paid- - - - (4,252) (4,252)
Employee share scheme loans repaid56 - - - - 56
Balance as at 31 December 2017122,574 (428) 3,200 263 45,845 171,454
UNAUDITED
Balance as at 1 July 201625,296 (527) (2,195) - 14,440 37,014
Profit for the period- - - - 8,705 8,705
Other comprehensive income/(loss)- (28) 1,813 41 - 1,826
Total comprehensive income/(loss) for the period- (28) 1,813 41 8,705 10,531
Increase in share capital in preparation for IPO68,914 - - - - 68,914
Shares issued30,105 - - - - 30,105
Transaction costs arising on share issue(1,797) - - - - (1,797)
Balance as at 31 December 2016122,518 (555) (382) 41 23,145 144,767
The above interim consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
NEW ZEALAND KING SALMON
12

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
The above interim consolidated statement of cash flows should be read in conjunction with the accompanying notes.
UNAUDITEDUNAUDITED
31 Dec 201731 Dec 2016
$000$000
Operating activities
Receipts from customers82,464 59,744
Payments to suppliers(49,263) (43,033)
Payments to employees(17,329) (15,189)
Interest received80 78
Interest paid(293) (1,052)
Insurance and settlement income- 214
Other income received1,352 -
Income tax paid(2,783) (1,741)
Net cash flows from operating activities14,228 (979)
Investing activities
Proceeds from sale of property, plant and equipment- 10
Purchase of property, plant and equipment(5,263) (3,696)
Purchase of intangible assets(14) (49)
Net cash flow from investing activities(5,277) (3,735)
Financing activities
Repayment of revolving loan- (9,000)
Government grants received147 -
Gross proceeds from share issue- 30,105
Transaction costs arising from share issue- (1,797)
Proceeds from shareholder advances- 1,402
Repayment of shareholder advances- (7,651)
Payment of finance lease liabilities(50) (70)
Employee share scheme loans repaid57 -
Dividends received on behalf of Custodian Holders28 -
Dividends paid(4,252) -
Net cash flows from financing activities(4,070) 12,989
Net increase in cash and cash equivalents4,881 8,275
Cash and cash equivalents at 1 July10,648 2,419
Cash and cash equivalents at 31 December15,529 10,694
INTERIM FINANCIAL REPORT
13

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
1. CORPORATE INFORMATION
The interim financial statements of New Zealand King Salmon Investments Limited (the Company) and its subsidiaries (together the
Group) for the six months ended 31 December 2017 were authorised by the Directors on 28 February 2018.
New Zealand King Salmon Investments Limited is a profit-orientated company incorporated and domiciled in New Zealand. The
Company is registered under the Companies Act 1993 and listed on the NZX Main Board (“NZX”) and the Australian Securities Exchange
(“ASX”). The Company is an FMC reporting entity under the Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013.
The interim consolidated financial statements are for the six months ended 31 December 2017 and have been prepared in accordance
with NZ GAAP. New Zealand King Salmon Investments Limited is a profit-orientated entity.
The Group is principally engaged in the farming, processing and sale of premium salmon products.
2. BASIS OF PREPARATION
a. Statement of compliance
The interim consolidated financial statements for the six months ended 31 December 2017 have been prepared in accordance with NZ
IAS 34 - Interim Financial Reporting and IAS 34 Interim Financial Reporting, and should be read in conjunction with the annual financial
statements as at 30 June 2017 which were prepared in accordance with NZ IFRS and IFRS.
The interim consolidated financial statements for the six months ended 31 December 2017 are unaudited. Comparative information
for the interim consolidated statement of financial position is at 30 June 2017 and is audited. Comparative information for the interim
consolidated statement of comprehensive income, statement of interim consolidated changes in equity and interim consolidated
statement of cash flows is for the comparative six month period and is unaudited.
b. Basis of measurement
The accounting policies adopted in the interim financial statements are consistent with those applied in the annual financial statements
as at 30 June 2017.
c. Significant accounting judgements, estimates and assumptions
Management have applied the same principles and used the same key sources of estimation in the preparation of the interim financial
statements as those applied to in the consolidated financial statements for the year ended 30 June 2017.
3. SEASONALITY
The Group’s business is not considered to be highly seasonal. Sales and related costs vary from month to month with overall variation
considered to be immaterial.
NEW ZEALAND KING SALMON
14

4. SEGMENT INFORMATION
Segment results
For management purposes, the Group is organised into three business units based on geographical sales market and customer channel.
The operating results of the business units are monitored for the purpose of making decisions about resource allocation and
performance assessment.
The Group’s reportable segments are:
New Zealand Retail
The company provides these customers with pre-packed value added products (including wood roasted and cold smoked product),
whole fresh fish and pre-cut fillets.
New Zealand Foodservice
The company provides these customers with a broad variety of salmon products including whole fresh fish, pre-cut fillets, portions and a
range of smoked products.
Export
Predominantly customers based outside New Zealand most of whom currently fall into the Foodservice category as described above.
Segment performance is evaluated at the EBITDA level and results are as follows:
New Zealand
Retail
New Zealand
Foodservice
Export
MarketTotal
UNAUDITED$000$000$000$000
Six months ended 31 Dec 2017
Revenue22,985 20,752 43,951 87,688
Segment EBITDA4,728 5,989 13,593 24,310
UNAUDITED
Six months ended 31 Dec 2016
Revenue17,136 19,490 27,000 63,626
Segment EBITDA3,944 5,231 7,013 16,188
Depreciation, amortisation, finance income and costs, and fair value gains and losses on financial assets are not allocated to individual
segments as the underlying instruments are managed on a group basis.
Segment profit reconciles to profit before income tax as follows:
UNAUDITEDUNAUDITED
31 Dec 201731 Dec 2016
$000$000
Segment profit24,310 16,188
Depreciation, amortisation and impairment(2,419) (2,106)
Net finance costs(337) (1,486)
Group profit before tax21,554 12,596
The Group does not prepare information allocating assets and liabilities to the market facing segments as all material assets and
liabilities are managed on a group basis.
UNAUDITEDUNAUDITED
31 Dec 201731 Dec 2016
Revenue by geographical location of customers
$000$000
New Zealand43,736 36,626
North America25,636 14,229
Australia6,675 6,249
Japan5,683 2,687
Europe1,311 946
Other4,647 2,889
Total revenue87,688 63,626
Sales net of settlement discounts to two major customer for the period ended December 2017 totalled $18,842k or 22% of total sales
(December 2016 one major customer accounted for $8,5161k or 13%). In both years, these customers were included in the New Zealand
Retail segment.
INTERIM FINANCIAL REPORT
15

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
5. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing the profit for the year attributable to shareholders of the Company by the
weighted average number of ordinary shares on issue during the year. Diluted earnings per share assume conversion of all potential
ordinary shares in determining the weighted average number of ordinary shares on issue.
UNAUDITEDUNAUDITED
31 Dec 201731 Dec 2016
Earnings per share$000$000
Profit attributable to ordinary equity holders 15,735 8,705
# of Shares# of Shares
000000
Weighted average number of ordinary shares for diluted earnings per share138,320 121,439
Basic earnings per share $0.11 $0.07
Diluted earnings per share $0.11 $0.07
6. INVENTORIES
UNAUDITEDAUDITED
31 Dec 201730 Jun 2017
Inventories$000$000
Raw materials12,593 9,525
Work in progress141 -
Finished goods5,788 7,149
Total inventories18,522 16,674
UNAUDITEDUNAUDITED
31 Dec 201731 Dec 2016
Amount of inventories recognised as an expense in the statement of comprehensive income$000$000
Cost of inventories recognised as an expense76,614 59,596
Movement in net realisable value of inventory decrease(370) (357)
Total cost of goods sold76,244 59,239
The cost of inventories recognised as an expense for the period ended December 2017 includes a fair value uplift at point of harvest of
$26,456k (December 2016: $17,688k).
7. BIOLOGICAL ASSETS
The Group has three hatcheries in the South Island and eight operational marine salmon farms in the Marlborough Sounds. The fish
livestock typically grow for up to 31 months before harvest.
UNAUDITEDCost Fair valueTotal
Biological assets$000$000$000
As at 1 July 201745,088 34,428 79,516
Increase due to biological transformation
1
34,408 27,039 61,447
Decrease due to harvest
2
(32,138) (26,456) (58,594)
Decrease due to mortality
3
(2,954) - (2,954)
Changes in fair value
4
- 4,165 4,165
As at 31 December 201744,404 39,176 83,580
1
Biological transformation fair value is impacted by volume increases (net of mortalities) and fish size at reporting date relative to the
target harvest weight of 4 kgs (proportional recognition).
2
Harvested fair value is included under cost of goods sold in the statement of comprehensive income and is calculated by multiplying
the current year’s harvest (biomass) by the prior year’s expected gross margin per kg (recognised at 100%).
3
Mortality cost is expensed directly to the statement of comprehensive income in the period which it occurs.
4
Changes in fair value are impacted by movements in margin primarily being changes in sales price and costs to sell (fish cost, harvest,
processing and freight to market).
NEW ZEALAND KING SALMON
16

AUDITEDCost Fair valueTotal
Biological assets$000$000$000
As at 1 July 201636,348 16,602 52,950
Increase due to biological transformation70,330 50,606 120,936
Decrease due to harvest(56,346) (37,019) (93,365)
Decrease due to mortality(5,244) - (5,244)
Changes in fair value- 4,239 4,239
As at 30 June 201745,088 34,428 79,516
UNAUDITEDUNAUDITED
31 Dec 201731 Dec 2016
Fair value gain / (loss) recognised in profit and loss$000$000
Gain arising from growth of biological assets27,039 27,992
Movement in fair value of biological assets4,165 730
Total fair value gain on biological transformation31,204 28,722
UNAUDITEDAUDITED
31 Dec 201730 Jun 2017
Estimated closing biomasskg 000kg 000
Closing freshwater stocks158 142
Closing seawater stocks6,526 6,085
Total estimated closing biomass live weight6,684 6,227
UNAUDITEDUNAUDITED
31 Dec 201731 Dec 2016
kg 000kg 000
Live weight harvested for the period (metric tonnes)5,027 3,861
Fair value measurement
Measurement of fair value is performed using a fair value model. The method of valuation therefore falls into level 3 of the fair value
hierarchy as the inputs are unobservable inputs.
The valuation of biological assets is carried out separately for each site at a brood and strategy level. Estimated actual cost up to
the date of harvest per site is used to measure the expected margin at the time the fish is defined as ready for harvest, being 4.0kg
live weight. Selling price is estimated at balance date based on the most relevant future market price at expected harvest date. The
expected gross margin is recognised proportionately based on average biomass at reporting date. Fair value measurement commences
at the date of transfer to sea water as this is considered the point at which the fish commence their grow out cycle.
Fair value risk and sensitivity
The Group is exposed to financial risks relating to the production of salmon stocks including climatic events, disease and contamination
of water space.
The Group seeks to produce and market the highest quality salmon products. Extensive monitoring and benchmarking is carried out
to provide optimum conditions and diets to maximise fish performance during the grow out cycle. Sales are maintained in a range of
brands, products and markets to maximise returns from the quality mix of fish harvested.
The estimate of unrealised fair value gain from cost is based on several assumptions. Changes in these assumptions will impact the fair
value calculation. The realised profit which is achieved on the sale of inventory will differ from the calculations of fair value of biological
assets because of changes in key factors such as the final market destinations of inventory sold, changes in price, foreign exchange rates,
harvest weight, growth rates, mortality, cost levels and differences in harvested fish quality.
Leaving all other variables constant a 5.0% increase/decrease in estimated average future sales prices would have increased/decreased
the fair value of biological assets on hand at balance date and profit before tax by $5.9m (excludes the impact of finished goods), while
a 5.0% increase/decrease in future harvest volume would increase/decrease the fair value of biological assets on hand and profit before
tax by $2.0m.
A 5% increase/decrease in estimated future costs to sell would decrease/ increase the fair value of biological assets on hand at balance
date and profit before tax by $4.0m. Changes in fish health and environmental factors may affect the quality of harvested fish, which
may be reflected in realised profit via both achieved sales price and production costs.
INTERIM FINANCIAL REPORT
17

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
8. INTEREST BEARING LOANS AND BORROWINGS
UNAUDITEDAUDITED
31 Dec 201730 Jun 2017
Current interest bearing loans and borrowings$000$000
Finance lease liabilities201 144
Other borrowings1,312 270
Total current interest bearing loans and borrowings1,513 414
Non-current interest bearing loans and borrowings
Finance lease liabilities16 124
Secured bank loans10,000 10,000
Total non-current interest bearing loans and borrowings10,016 10,124
The Company has facilities with BNZ for $30m, secured by a general security deed over the assets of the Group. The expiry date of facility
A of $18m is 25 November 2020, and facility B of $12m expires on 18 October 2019. At balance date $10m of facility A was drawn (June
2017: $10m).
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash and short term deposits, trade receivables, trade payables and other current liabilities is considered a
reasonable approximation to their fair value due to the short term maturities of these instruments.
The carrying value of the BNZ loan drawing of $10m is considered a reasonable approximation of its fair value due to the short term
maturities of the drawings. New Zealand King Salmon Investments has the discretion to roll these short term drawings out to 2020.
The following financial instruments of the Group are carried at fair value:
UNAUDITEDAUDITED
31 Dec 201730 Jun 2017
Current derivative financial assets$000$000
Forward exchange contracts1,763 1,776
Foreign exchange options419 290
Total Current derivative financial assets2,182 2,066
Non-current derivative financial assets
Forward exchange contracts2,256 1,882
Foreign exchange options1,776 1,314
Total Non-current derivative financial assets4,032 3,196
Current derivative financial liabilities
Forward exchange contracts9 519
Foreign exchange options53 24
Interest rate swaps844 734
Total Current derivative financial liabilities906 1,277
Non-current derivative financial liabilities
Forward exchange contracts- 451
Foreign exchange options642 307
Interest rate swaps185 190
Total Non-current derivative financial liabilities827 948
NEW ZEALAND KING SALMON
18

The carrying value of obligations under financial leases differs from fair value as follows:
UNAUDITEDAUDITED
As at 31 Dec 2017As at 30 Jun 2017
Carrying
amount
Fair value
Carrying
amount
Fair value
$000$000$000$000
Obligations under finance leases217 200267 233
Total obligations under finance leases217 200 267 233
Valuation methods
Financial instruments have been categorised into the following hierarchy and valued according to the following definitions, based on the
lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (i.e. as prices)
or indirectly (i.e. derived from prices)
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)
All derivative financial instruments for which a fair value is recognised have been categorised within level 2 of the fair value hierarchy.
Industry experts have provided the fair values for all derivatives based on an industry standard model.
10. COMMITMENTS AND CONTINGENCIES
UNAUDITED
Capital commitments
The Group has entered into an agreement to purchase plant and equipment. As at 31 December 2017 the total commitment is $1,720k
(June 2017: $1,137k).
Contingencies
The Group has a contingent liability of $1,018k in respect of a fish transport contract requiring the Group to purchase three bulk tankers
(including modifications made in 2017), should the fish transport contract be terminated early (June 2017: $995k).
11. CAPITAL AND RESERVES
UNAUDITEDAUDITED
Share capital31 Dec 201730 Jun 2017
Issued shares000000
Ordinary shares138,475 138,158
Total issued shares138,475 138,158
Ordinary shares are fully paid with no par value. Each ordinary share has an equal right to vote, to participate in dividends, and to share
in any surplus on winding up of the Company. Dividends paid during the period ended December 2017 consisted of a fully imputed final
dividend of $0.02 per share and a fully imputed special dividend of $0.01 paid on 18 September 2017 (December 2016: nil).
# of SharesShare Capital
UNAUDITEDAUDITEDUNAUDITEDAUDITED
31 Dec 201730 Jun 201731 Dec 201730 Jun 2017
Movement in ordinary share capital000000$000$000
As at 1 July138,158 25,295 122,518 25,296
Shareholder loans converted to share capital- 26,941 - 70,202
Shares issued by way of 2.11 to 1 share split- 57,955 - -
Issue of new shares pursuant to IPO- 26,786 - 30,000
Transactional costs arising on share issue- - - (1,797)
Employee offer pursuant to IPO- 1,181 - 1,322
Employee share scheme loans repaid- - 56 -
Share issue for employee share scheme317 - - (2,505)
As at 31 December or 30 June138,475 138,158 122,574 122,518
INTERIM FINANCIAL REPORT
19

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
Reserves
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange difference arising from the translation of the financial statements of
the foreign subsidiary.
Hedge reserve
The hedge reserve represents the unrealised gains and losses on interest rate swaps and foreign currency forward contracts that the
Group has taken out in order to mitigate interest rate and foreign currency risks, net of deferred tax.
Share based payment reserve
The share based payment reserve relates to two long term incentive (LTI) schemes and an employee share ownership scheme. All of
these schemes involve the Company making interest-free limited recourse loans to selected personnel to acquire shares in the Company.
The employees must remain in employment for the duration of the vesting or escrow periods before the employees receive the full
benefit of share ownership.
The senior leadership LTI scheme was established prior to the IPO and relates to 3,176,878 shares in the Company. The ordinary shares in
the Company are security for the interest-free limited recourse loans and are held in escrow until after the financial results have been
announced for the year ending 30 June 2018. Loans relating to 114,714 shares were repaid during the period.
The senior executive LTI scheme was established at the time of the IPO with 993,671 ordinary shares in the Company being issued at an
issue price of $1.12 per share. The ordinary shares in the Company are security for the interest-free limited recourse loans, are held by a
Custodian and will vest three years from the granting date of 19 October 2016. During the period, 164,548 of these shares were forfeited.
On 29 September 2017 a further 317,215 shares were issued, being 270,274 shares issued to existing senior executive shareholders at an
issue price of $1.22 per share, and 47,241 shares issued to new senior executive shareholders at an issue price of $1.77 per share. These
shares will also vest three years from the granting date. The price to be paid for each share is the issue price at granting date, reduced
by any dividends that are applied to the interest-free limited recourse loans. No shares vested or expired during the period.
The employee share ownership scheme was established at the time of the IPO and relates to 187,076 ordinary shares in the Company. The
ordinary shares in the Company are security for the interest-free limited recourse loans which may remain in place whilst the holder is in
employment with the Company. Loans relating to 20,538 shares were repaid during the period by employees leaving the Company.
Retained earnings
Retained earnings represents the profits retained in the business.
12. RELATED PARTY DISCLOSURES
Subsidiaries
New Zealand King Salmon Investments Limited has the following trading subsidiaries.
SubsidiaryCompany of IncorporationEquity Interest
The New Zealand King Salmon Co LimitedNew Zealand100%
The New Zealand King Salmon Pty LimitedAustralia100%
New Zealand King Salmon Exports LimitedNew Zealand100%
New Zealand King Salmon USA Inc.United States of America100%
The principal activity of The New Zealand King Salmon Co Ltd is the farming and processing of salmon. The activity of The New Zealand
King Salmon Pty Ltd is the distribution of salmon.
At balance date Oregon Group Limited owned 40.17% (30 June 2017: 40.3%) of the shares in New Zealand King Salmon
Investments Limited.
NEW ZEALAND KING SALMON
20

Transactions with related parties
Sales to and purchases from related parties are made in arm’s length transactions both at normal market prices and on normal
commercial terms. The following provides the total amount of transactions that were entered into with related parties for the relevant
financial year:
UNAUDITEDUNAUDITED
31 Dec 201731 Dec 2016
Related party payments$000$000
Interest paid - Oregon Group Limited- 272
Interest paid - Other shareholders- 194
Good and services purchased from other related parties4 1
Total related party payments4 467
Related party sales
Goods and services sold to related parties(550) (431)
Total related party sales(550) (431)
Sales to and purchases from related parties are made in arm’s length transactions, both at normal market prices and on normal
commercial terms.
UNAUDITEDAUDITED
Amounts owing to related parties31 Dec 201730 Jun 2017
Current amounts owing to related parties$000$000
Other amounts owing to related parties46 18
Total current amounts owing to related parties46 18
UNAUDITEDAUDITED
31 Dec 201730 Jun 2017
Amounts owing by related parties$000$000
Amounts owing by related parties57 94
Total amounts owing by related parties57 94
UNAUDITEDUNAUDITED
Compensation of key management personnel of the Group31 Dec 201731 Dec 2016
Key management personnel compensation$000$000
Short-term employee benefits1,372 1,390
Share based payment expense121 41
Post employment pension and medical benefits75 55
Total key management personnel compensation1,568 1,486
13. EVENTS AFTER BALANCE DATE
The Ministry for Primary Industries initiated a process which may result in a swap of certain water space licences for alternative water
space which remains ongoing at the date of completing these financial statements. On 14 February 2018 the Marlborough Salmon Farm
Relocations Advisory Panel report to the previous Minister for Primary Industries was made publicly available by the Minister of Fisheries.
The Minister has indicated that he will consider the report and will take some months to issue a decision. The outcome of this process
could create significant changes to the Group’s operations in future.
Subsequent to the end of the period there has been significantly lower than normal fish survival rates at sea farms for this time of year.
The abnormal survival rates are expected to continue in the short term, and are expected to return to normal historical survival rates
as the extraordinarily high summer temperatures return towards normal temperatures. These are considered non-adjusting subsequent
events. The financial effect of these events cannot be reliably estimated, as it is highly dependent on a range of future impacts including
sales prices, product mix, harvest volume, mortality and harvested fish cost.
INTERIM FINANCIAL REPORT
21

REVIEW REPORT
Review Report to the Shareholders of New Zealand King Salmon Investments
Limited (“the company”) and its subsidiaries (together “the group”)
We have reviewed the interim financial statements on pages 10 to 21, which comprise the statement of financial position of the group as at
31 December 2017, and the statement of comprehensive income, statement of changes in equity and statement of cash flows of the group
for the six month period ended on that date, and a summary of significant accounting policies and other explanatory information.
This report is made solely to the company's shareholders, as a body. Our review has been undertaken so that we might state to the
company's shareholders those matters we are required to state to them in a review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's shareholders as a
body, for our review work, for this report, or for our findings.
Directors’ Responsibilities
The directors are responsible for the preparation and fair presentation of interim financial statements which comply with New Zealand
Equivalent to International Accounting Standard 34: Interim Financial Reporting and for such internal control as the directors determine is
necessary to enable the preparation and fair presentation of the interim financial statements that are free from material misstatement,
whether due to fraud or error.
Reviewer’s Responsibilities
Our responsibility is to express a conclusion on the interim financial statements based on our review. We conducted our review in
accordance with NZ SRE 2410 Review of Financial Statements Performed by the Independent Auditor of the Entity. NZ SRE 2410 requires us
to conclude whether anything has come to our attention that causes us to believe that the financial statements, taken as a whole, are not
prepared in all material respects, in accordance with New Zealand Equivalent to International Accounting Standard 34: Interim Financial
Reporting. As the auditor of the group, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the
annual financial statements.
Basis of Statement
A review of interim financial statements in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs
procedures, primarily consisting of making enquiries, primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures.
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International
Standards on Auditing (New Zealand). Accordingly we do not express an audit opinion on those financial statements.
We provide taxation advice to the group. We have no other relationship with, or interest in, the group.
Conclusion
Based on our review nothing has come to our attention that causes us to believe that the accompanying interim financial statements,
set out on pages 10 to 21, do not present fairly, in all material respects, the financial position of the group as at 31 December 2017 and
its financial performance and cash flows for the six month period ended on that date in accordance with New Zealand Equivalent to
International Accounting Standard 34: Interim Financial Reporting.
Our review was completed on 28 February 2018 and our findings are expressed as at that date.
Christchurch
A member firm of Ernst & Young Global Limited
NEW ZEALAND KING SALMON
22

NEW ZEALAND KING SALMON INVESTMENTS LIMITED
93 Beatty Street, Annesbrook, Nelson 7011
www.kingsalmon.co.nz