NZK 1H19 Half Year Results Announcement

28 February 2019

NEW ZEALAND KING SALMON ANNOUNCES POSITIVE 1H19 RESULT AND INTERIM DIVIDEND

Today, New Zealand King Salmon Investments Ltd (NZX and ASX:NZK) (the Company) reported
financial performance for the six month period ended 31 December 2018 (1H19) in line with Guidance
for FY19. Highlights outlined in the Company’s first half result, include:

• Sales revenue of $87.7 million (matching the prior comparable period, 1H18) underpinned by
increasing demand, improved pricing mix, export markets expansion and a favourable exchange
rate.
• Sales volume of 3,824 metric tonnes (mt) of gilled and gutted salmon, down 13% from 4,387mt
in 1H18, due to harvest seasonality and lower fish numbers carried forward from FY18.
• Statutory Net Profit After Tax of $15.1 million, compared with $15.7 million in 1H18.
• Pro Forma Operating EBITDA
1
of $17.3 million, compared with $19.5 million in 1H18.
• Alan Cook appointed as COO in February 2019, bringing substantial aquaculture and
processing experience to the Company.
• Fully imputed dividend of 2.0 cents per share declared.

Recapping the results, Chairman John Ryder said “We are pleased to announce first half results in-line
with our expectations. Strong branding and market growth have led to a successful six-month period
and we expect FY19 financial performance on track with previous Guidance and building on our strong
FY18 results. Overall, today’s results demonstrate the positive market conditions domestically and in
export markets.

“Our quality portfolio in buoyant world markets including our innovations with the Ōra King TYEE
programme plus our Omega Plus petfood range continue to support the company’s premium branded
strategy.”


1
Pro Forma Operating EBITDA is a non-GAAP profit measure used by New Zealand King Salmon. Pro Forma
Operating EBITDA reverses out fair value gains associated with the revaluation of livestock pursuant to NZ IAS 41-
Agriculture and NZ IAS 2-Inventory. The application of NZ IAS 41–Agriculture, and NZ IAS 2– Inventory effectively
results in the New Zealand King Salmon Group recognising expected profits from the sale of livestock prior to
sale. Other international listed salmon companies will typically present ‘Operating’ results which remove the
impact of these gains or losses. New Zealand King Salmon therefore believes that Operating results enable a
better comparison of financial performance between its peers and between periods. A full reconciliation
between Statutory GAAP and Pro Forma results is included in the 1H19 Half Year Financial Results Investor
Presentation.

New Zealand King Salmon CEO Grant Rosewarne described the Company’s response to environmental
challenges as part of our wider commitment to a more sustainable and resilient operation.

“Every business has challenges and ours is no exception. While lower salmon sales volumes were
largely mitigated by value gains in our sales activities, adapting to pressing environmental changes
remains a business priority moving forward.

“We believe that aquaculture can play a significant role in New Zealand’s contribution towards a more
sustainable global food system. Specifically, we continue to work closely with central government to
relocate several low-flow sites in the Marlborough Sounds for improved environmental, social and
economic outcomes. We continue to pursue our initial investigations into open ocean farming.

“Our changing climate and the need for low-carbon, high-nutrition food production models are truly
global issues. We see aquaculture as a global force for good in addressing these challenges. With that
vision in mind, we’ve joined the UN Global Compact’s Ocean Action Platform aiming to be stewards of
the ocean and farm for the future.”

The Board reaffirms previous guidance for the FY19 year for a Pro Forma Operating EBITDA result of
$25.0-28.5m based on known factors at this time. As in previous years, an update on fish performance
will be reported following the key summer period. The Board is pleased to declare a fully imputed
interim dividend of 2.0 cents per share, to be paid on 22 March 2019.


<ENDS>

Contact:
Grant Rosewarne, Managing Director and CEO, New Zealand King Salmon Investments Ltd
email: grant.rosewarne@kingsalmon.co.nz

About New Zealand King Salmon
New Zealand King Salmon is the world’s largest aquaculture producer of the premium King salmon
species. We operate under our four key brands: Ōra King, Regal, Southern Ocean, and Omega Plus,
and the New Zealand King Salmon label. We have been growing and selling salmon to consumers for
more than 30 years. Today we employ around 500 people. New Zealand investors make up a
significant percentage of the ownership of NZ King Salmon, and the communities of Marlborough,
Nelson and Tasman are well represented with around 400 of the approximately 2,800 shareholders
being from the Top of the South.
More information can be found at www.kingsalmon.co.nz

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A member firm of Ernst & Young Global Limited



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 2 to 14, which comprise the statement of financial
position of the group as at 31 December 2018, 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 2 to 14, do not present fairly, in all material respects, the financial position
of the group as at 31 December 2018 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 27 February 2019 and our findings are expressed as at that date.




Chartered Accountants
Christchurch

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New Zealand King Salmon Investments Limited, 93 Beatty St, Nelson 7011, New Zealand
NEW ZEALAND KING SALMON INVESTMENTS LIMITED
Results for announcement to the market
Reporting Period 6 months to 31 December 2018
Previous Reporting Period 6 months to 31 December 2017

Amount ($000s) Percentage change
Revenue from ordinary activities $NZ87,681 0.0%
Profit (loss) from ordinary activities
after tax attributable to security
holder
$NZ15,080 (4.1%)
Net profit (loss) attributable to
security holders
$NZ15,080 (4.1%)

Dividends Amount per security Imputed amount per security
Interim dividend $NZ0.02 $NZ0.007778
Special dividend N/A N/A

Record Date 13 March 2019
Dividend Payment Date 22 March 2019

Net tangible assets 31 December 2018 31 December 2017
Net tangible assets per security $0.93 $0.90

Earnings per share (EPS) 31 December 2018 31 December 2017
EPS $0.11 $0.11

New Zealand King Salmon Investments Limited, 93 Beatty St, Nelson 7011, New Zealand
Basis of report
This announcement is accompanied by the reviewed Financial Statements for the six months ended
31 December 2018 which is the basis for the information presented in this announcement. These
financial statements have been prepared in accordance with New Zealand Generally Accepted
Accounting Practice and with the New Zealand equivalents to International Financial Reporting
Standards.
Key comments relating to the understanding of this announcement are described below:

The impact of IAS 41 – Agriculture
The accounting standard IAS 41 – Agriculture requires biological assets to be measured at fair value
less costs to sell. This results in fair value gains or losses being recongised through profit or loss before
the stock is actually sold. The impact of the fair value gains and the key assumptions used in
calculating fair value are detailed in Note 7 of the 31 December 2018 Financial Statements. The pro-
forma information presented in the investor presentation may also aid users understand the impact
of IAS 41 – Agriculture on the 31 December 2018 Financial Statements.

Non-Recurring and Infrequent Items
Details of non-recurring and infrequent items during the reporting period can be found in the Interim
Results FY19 presentation.

Net tangible assets per share
Net tangible assets per share can be found in the 31 December Financial Statements. The impact of
the accounting standard IAS 41 – Agriculture has also significantly increased the asset base due to fair
value gains from biological transformation, as per Note 7 of the 31 December 2018 Financial
Statements.

Earnings per share
The impact of the accounting standard IAS 41 – Agriculture has become embedded within earnings
due to the fair value gains from biological transformation, as per Note 7 of the 31 December 2018
Financial Statements.

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$
13 March, 201922 March, 2019
$0.02000
Date Payable
$$0.001389$0.007778
In dollars and cents
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$0.00000
NZ Dollars$0.003529
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03 548 571403 538 087428022019
Ordinary SharesNZNZKE0003S0
EMAIL: announce@nzx.com
Notice of event affecting securities
1
New Zealand King Salmon Investments Limited
Andrew ClarkDirectors Resolution