NZK 1H22 Half Year Results Announcement

Market Announcement

September 30, 2021

NZK - NEW ZEALAND KING SALMON ANNOUNCES 1H22 RESULT
New Zealand King Salmon Investments Ltd (NZX & ASX: NZK) reports its financial performance for
the six months period ended 31 July 2021 (1H22). Key points include:

• Small fish size and compensating restrictions on harvest have negatively impacted our result
• The effects of Covid-19 disruptions have been largely overcome with the exception of freight
availability and cost
• Revenue of $80.1m, up from $67.0m in 1H21, reflecting clearance of excess inventory and
sales recovery ($4.2m clearance).
• Sales volume of 3,629 tonnes compared with 2,745 tonnes in 1H21 (470t clearance).
• Statutory NPAT of ($5.6m), compares with ($5.6m) in 1H21.
• Pro Forma Operating EBITDA of $3.3m, compared with $7.1m in 1H21.
• The main differences between Statutory and Proforma EBITDA profit measurement being
($13.5) FX close-out profits, $8.1m inventory fair value adjustment, and $0.98m FRS16
leases.

Chairman John Ryder said: “Unfortunately it’s been a challenging six months, but we have now
initiated our Prescient Aquaculture Model, built on decades of farming King salmon and the
experience of our own in-house team. Since the beginning of our new financial year, we have
returned to demand exceeding supply”.

“Our premium brands continue to show great strength in building customer relationships and
supporting margin growth, focusing on diversification across categories and markets to build
resilience.”

New Zealand King Salmon CEO Grant Rosewarne acknowledged it had been a tough period. “During
the first four months we made losses, more than fully offset by closing out excess foreign exchange
contracts. In June we were back to break even, followed by incremental gains in July of $1.3m
(proforma EBITDA), continuing into 2H, with August at $1.6m.

“We are forecasting harvest volumes in the second half of 2022 of over 4,000 tonnes delivering the
usual premium prices. We have consistently maintained prices for the core branded portfolio, even
through the Covid pandemic. Excess unbranded stock, mainly whole frozen fish, continues to be sold
to international customers outside of established branded channels.

“During Covid FY21 we refocused on NZ retail (with heavy price promotions) and developed
additional fresh speciality and e-commerce business in the US, which helped get us through FY21.

Now, in FY22, we have seen the return of the US foodservice sector whilst retaining the incremental
fresh business to deliver improving returns.

“Continuing our innovation program for Ōra King, we launched a limited edition of our
new Ōra King Keiji product, which is our interpretation of the famed Japanese Keiji, a premium
sashimi or plate-size salmon enjoyed for its unique flavour and delicate texture.

“We also premiered the Ōra King Documentary to offer chefs around the world a virtual experience
of our brand, despite the closure of our borders. The documentary
https://orakingsalmon.co.nz/documentary/ deepens the story of Ōra King with material filmed
across our egg to plate operation.

“Internationally, we have continued to drive demand for our Regal smoked salmon products, and
secured three international accolades for our Regal range, including Best New Product across all
categories at the 2021 sofi awards with the Speciality Food Association of North America.

“Furthermore, our Omega Plus pet food range continues to show rapid growth with the launch into
Animates stores around New Zealand. Annualised revenue is currently running at about $4m pa” Mr
Rosewarne added.

“Our aquaculture team continues to investigate and implement solutions for improved fish health
outcomes at our sea farm sites. This work is underpinned by our new production model, our own
fish health vet, Dr Zac Waddington, and independent science providers.

“In terms of future growth, a hearing has been set in Blenheim, the week beginning October 18 for
our open ocean Blue Endeavour application, 7kms north of Cape Lambert in the Cook Strait. This
project has multiple benefits - an improved environmental outcome, increase in scale, reduction in
operating costs, improvements in fish health and a lift in unit values. If successful, we would expect
a harvest in 2024.”

The application is aligned with the Government’s Aquaculture Strategy which was launched in late
2019 with the objective of the industry achieving $3 billion revenue by 2030.

“It’s undoubtedly an exciting time for the industry as the future for salmon farming is in the open
ocean. We will need the continued support from all levels of Government and the community to
achieve this. We firmly believe that Aquaculture could become New Zealand’s most valuable
industry and its greenest primary sector” Mr Rosewarne added.

New Zealand King Salmon will update market guidance over the coming months. The company has
not paid a dividend since the Covid pandemic started and this will remain under review.

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,
as well as 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 Bays and Tasman are well represented, with around 400 of the 2,900 shareholders from Top
of the South.

More information can be found at www.kingsalmon.co.nz

---

1H22
NEW ZEALAND KING SALMON INVESTMENTS LIMITED AND
SUBSIDIARIES
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2021
1

CONTENTS
FOR THE SIX MONTHS ENDED 31 JULY 2021
Page
Corporate directory
3
Consolidated statement of comprehensive income
4
Consolidated statement of financial position
5
Consolidated statement of changes in equity
6
Consolidated statement of cash flows
7
Notes to the consolidated financial statements
8 - 14
2

NEW ZEALAND KING SALMON INVESTMENTS LIMITED AND SUBSIDIARIES
CORPORATE DIRECTORY
BOARD OF DIRECTORSBANKERSNEW ZEALAND KING SALMON
INVESTMENTS LIMITED
John William Dudley Ryder The Bank of New ZealandTicker: NZK
Independent Non-Executive ChairmanDeloitte CentreListed on the NZX Main Board and
Grantley Bruce RosewarneLevel 6, 80 Queen Streetas a foreign Exempt Listing on the
Chief Executive Officer and Managing DirectorAucklandASX
Jack Lee PorusNew ZealandNZ Company number: 2161790
Non-Executive Director
Paul James SteereAUDITORRegistered Office
Independent Non-Executive Director93 Beatty Street
Lai Po SingErnst & Young (EY)Annesbrook
Non-Executive DirectorLevel 4, 93 Cambridge TerraceNelson
Chiong Yong TiongChristchurch New Zealand
Non-Executive DirectorNew Zealand
Catriona MacleodPostal Address
Independent Non-Executive DirectorLAWYERSPO Box 1180 Nelson 7040
New Zealand
Audit and Finance CommitteeChapman Tripp
Paul Steere (Chair)Level 34, PwC TowerTelephone
John Ryder15 Customs Street+64 3 548 5714
Jack Porus (Appointed 26 August 2020)Auckland
New Zealand
Website
Nominations and Remuneration Committeewww.kingsalmon.co.nz
Paul Steere (Chair)Gascoigne Wicks
Jack Porus79 High StreetInvestor Relations
Blenheiminvestor@kingsalmon.co.nz
Health, Safety and Risk CommitteeNew Zealand
Catriona Macleod (Chair)
Chiong Yong Tiong
Duncan CotterillSHARE REGISTRY
197 Bridge StreetComputershare Investor
NelsonServices Limited
New ZealandLevel 2, 159 Hurstmere Road
Takapuna
Auckland 0622
New Zealand
+64 9 488 8777
enquiry@computershare.co.nz
Computershare Investor
Services Pty Limited
Yarra Fall
452 Johnston Street
Abbotsford VIC 3001
Australia
+61 3 9415 4083
enquiry@computershare.co.nz
3

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 JULY 2021
UNAUDITEDUNAUDITED
31 July 202131 July 2020
Note$000$000
Revenue from contracts with customers580,095 67,016
Cost of goods sold including fair value uplift at point of harvest(86,621) (68,507)
Fair value gain on biological transformation830,692 16,418
Freight costs to market(11,286) (7,373)
Gross profit
12,880 7,554
Other income327 3,812
Sales, marketing and advertising expenses(6,480) (5,792)
Distribution overheads(2,800) (2,130)
Corporate expenses(4,939) (5,072)
Other expenses(102) (33)
Earnings before interest, tax, depreciation and amortisation
(1,114) (1,661)
Depreciation and amortisation expense(5,170) (5,062)
Finance income16 2
Finance expenses(1,186) (995)
(Loss) / Profit before tax
(7,454) (7,716)
Income tax credit / (expense)1,858 2,091
(Loss) / Profit after tax(5,596) (5,625)
Other comprehensive income
Exchange differences on translation of foreign operations(82) (33)
Movement on cash flow hedges(3,601) 17,754
Income tax effect of movement on cash flow hedges
1,008 (4,971)
-
Net other comprehensive income/ (loss)
(2,675) 12,750
Total comprehensive income / (loss)(8,271) 7,125
UNAUDITEDUNAUDITED
Earnings per share31 July 202131 July 2020
Basic earnings per share
6
(0.04)$ (0.04)$
Diluted earnings per share
6
(0.04)$ (0.04)$
The above interim consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Other comprehensive income that may be reclassified to profit or loss in subsequent periods:
4

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 JULY 2021
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 February 2021
122,606(1,162) 18,47497451,651192,543
Profit / (loss) for the period- -
-
- (5,596) (5,596)
Other comprehensive income/(loss)- (82) (2,593) - - (2,675)
Total comprehensive income/(loss) for the period
- (82) (2,593) - (5,596) (8,271)
Share based payment expense- - - 65- 65
Balance as at 31 July 2021122,606(1,244) 15,8811,03946,055184,337
UNAUDITED
Balance as at 1 February 2020
122,606(564) (3,487) 77565,798185,128
Profit / (loss) for the period- - - - (5,625) (5,625)
Other comprehensive income/(loss)- (33) 12,783- 12,750
Total comprehensive income/(loss) for the period
- (33) 12,783- (5,625) 7,125
Dividends paid - ordinary- - - - (2,602) (2,602)
Share based payment expense- - - 102- 102
Balance as at 31 July 2020122,606(597) 9,29687757,571189,753
The above interim consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
6

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 JULY 2021
UNAUDITEDUNAUDITED
31 July 202131 July 2020
$000$000
Operating activities
Receipts from customers80,385 72,141
Payments to suppliers(59,303) (49,944)
Payments to employees(21,087) (21,123)
Interest received16 2
Interest paid(760) (658)
Insurance and settlement income- 3
Government grants received285 3,869
Proceeds from foreign currency forward contracts closed early13,495 -
Income tax paid(4,058) 320
Net cash flows (used in) / from operating activities
8,973 4,610
Investing activities
Proceeds from sale of property, plant and equipment8 9
Purchase of property, plant and equipment(6,440) (7,253)
Purchase of intangible assets(747) (346)
Net cash flow (used in) / from investing activities
(7,179) (7,590)
Financing activities
Proceeds from borrowings72,000 86,084
Repayment of borrowings(73,516) (78,070)
Gross proceeds from share issue- 11
Dividends paid- (2,602)
Payment of lease liabilities(852) (805)
Net cash flows (used in) / from financing activities
(2,368) 4,618
Net increase / (decrease) in cash and cash equivalents
(574) 1,638
Net foreign exchange difference
22 (33)
Cash and cash equivalents at 1 February
3,479 3,730
Cash and cash equivalents at 31 July
2,927 5,335
The above interim consolidated statement of cash flows should be read in conjunction with the accompanying notes.
7

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2021
1.CORPORATE INFORMATION
2.BASIS OF PREPARATION
a.Statement of compliance
b.Basis of measurement
c.Significant accounting judgements, estimates and assumptions
d.Covid-19
3.SEASONALITY
4.
NEW STANDARDS ADOPTED AND STANDARDS ISSUED NOT YET ADOPTED
a.New standards adopted
There have been no new standards adopted during the 6 months to 31 July 2021.
b.New standards not yet adopted
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 July 2021 were authorised by the Directors on 29 September 2021.
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 in the consolidated financial statements for the period ended 31 January 2021.
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.
The interim consolidated financial statements are for the six months ended 31 July 2021 and have been prepared in accordance with
NZ GAAP.
The accounting policies adopted in the interim financial statements are consistent with those applied in the annual financial
statements as at 31 January 2021.
The interim consolidated financial statements for the six months ended 31 July 2021 are unaudited. Comparative information for the
interim consolidated statement of financial position is at 31 January 2021 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 31 July 2020 and is unaudited. Comparative information are not what
was previously reported due to the change in balance date.
The Group is principally engaged in the farming, processing and sale of premium salmon products.
The consolidated financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand
($000), except when otherwise indicated.
While the impacts of the Covid-19 pandemic have continued to manifest during the reporting period, there remains some uncertainty
over the ongoing impact. This uncertainty is reflected in the Group's estimates of the net realisable value of inventory. The net
realisable value estimates the obsolescence and unmarketable items at the end of the reporting period based on assumptions of
future demand within a specific time horizon.
The Group's business is seasonal with higher sales in the summer months and higher mortality rates are typically highest in the
January to April period due to higher water temperatures at that time. This does impact on month to month profitability.
Following recent IFRIC decision on accounting for cloud computing costs, the Company is still reviewing potential impact and will
have the review finalised in time for its full year end financial statements as at 31 January 2022.
The interim consolidated financial statements for the six months ended 31 July 2021 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 31 January 2021 which were prepared in accordance with New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
8

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2021
5.SEGMENT INFORMATION
Segment results
UNAUDITEDUNAUDITED
31 July 202131 July 2020
$000$000
Revenue80,09567,016
Segment EBITDA(1,114) (1,661)
UNAUDITEDUNAUDITED
Segment EBITDA reconciles to profit / (loss) before income tax as follows:
31 July 202131 July 2020
$000$000
Segment EBITDA(1,114) (1,661)
Depreciation, amortisation and impairment(5,170) (5,062)
Net finance costs(1,170) (993)
Group profit / (loss) before tax(7,454) (7,716)
6.EARNINGS PER SHARE
UNAUDITEDUNAUDITED
31 July 202131 July 2020
Earnings per share$000$000
Profit / (loss) attributable to ordinary equity holders (5,596) (5,625)
# of Shares# of Shares
000000
Weighted average number of ordinary shares for diluted earnings per share138,986138,986
Basic earnings per share(0.04)$ (0.04)$
Diluted earnings per share(0.04)$ (0.04)$
7.INVENTORIES
UNAUDITEDAUDITED
31 July 202131 January 2021
Inventories$000$000
Raw materials16,56311,853
Work in progress1,9352,748
Finished goods24,86527,888
Total inventories43,36342,489
UNAUDITEDUNAUDITED
31 July 202131 July 2020
Amount of inventories recognised as an expense in the statement of comprehensive income$000$000
Cost of inventories recognised as an expense87,590 68,300
Movement in net realisable value provision(969) 207
Total cost of goods sold including fair value uplift at point of harvest86,621 68,507
8.BIOLOGICAL ASSETS
UNAUDITED
Cost Fair valueTotal
Biological assets$000$000$000
As at 1 February 2021
55,02533,16388,188
Increase due to biological transformation
1
42,18925,94768,136
Decrease due to harvest
2
(33,849) (23,280) (57,129)
Decrease due to mortality
3
(10,387) - (10,387)
Changes in fair value
4
- 4,7454,745
As at 31 July 2021
52,97840,57593,553
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 years harvest (biomass) by the prior
years 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).
Segment performance - Refer also Note 15 for detail of disaggregation of revenue by product, brand and geographical area.
The cost of inventories recognised as an expense for the period ended 31 July 2021 includes a fair value uplift at point of harvest of $23,348k, (31 July 2020:
$24,301k).This cost is included in cost of goods sold in the Statement of Comprehensive Income.
The Group has three hatcheries in the South Island and nine operational marine salmon farms in the Marlborough Sounds. The fish livestock typically grow for up to 31
months before harvest.
The Group's strategy is to maximise longer term sales and overall margins by focusing on branded, premium priced and differentiated sales across its range of
markets, channels and customers. The operating results of the whole business are monitored for the purpose of making decisions about resource allocating and
performance. Accordingly, the Group is considered to consist of one operating segment.
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 assumes conversion of all potential ordinary shares in determining the weighted average number
of ordinary shares on issue.
9

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2021
BIOLOGICAL ASSETS (CONTINUED)
UNAUDITED
Cost Fair valueTotal
Biological assets$000$000$000
As at 1 February 202053,85650,178104,034
Increase due to biological transformation
1
40,48617,80558,291
Decrease due to harvest
2
(30,399) (28,678) (59,077)
Decrease due to mortality
3
(8,274) - (8,274)
Changes in fair value
4
- (1,387) (1,387)
As at 31 July 2020
55,66937,91893,587
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 years harvest (biomass) by the prior
years 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).
AUDITED
Cost Fair valueTotal
Biological assets$000$000$000
As at 1 July 202053,70438,67492,379
Increase due to biological transformation
1
51,80733,72685,533
Decrease due to harvest
2
(42,233) (34,860) (77,093)
Decrease due to mortality
3
(8,253) - (8,253)
Changes in fair value
4
- (4,377) (4,377)
As at 31 January 2021
55,02533,16388,188
UNAUDITEDUNAUDITED
31 July 202131 July 2020
Fair value gain / (loss) recognised in profit and loss$000$000
Gain arising from growth of biological assets25,94717,805
Movement in fair value of biological assets4,745(1,387)
Total fair value gain on biological transformation30,692 16,418
UNAUDITEDUNAUDITED
31 July 202131 July 2020
Harvested biomasstonnestonnes
Total live weight harvested for the period 3,9034,070
UNAUDITEDAUDITED
31 July 202131 January 2021
Estimated closing biomasstonnestonnes
Closing fresh water stocks138173
Closing seawater stocks6,3356,691
Total estimated closing biomass live weight 6,4736,864
Fair value measurement
Fair value risk and sensitivity
The estimated unrealised fair value gain from cost at 31 July 2021 has increased from the prior period end (31 January 2021) estimation due to core sales volumes
broadly returning to pre-Covid levels as expected. While price increases have been implemented, some costs of producing and shipping product still remain higher
than normal. 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 and product mix 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 15% increase/decrease in average future sales prices would have increased/decreased the fair value of biological assets on hand
and profit before tax by $19.5m (31 January 2021: 15% increase / decrease $18.3m) (excludes the impact of finished goods), while a 15% increase/decrease in
estimated future harvest volume would increase/decrease the fair value of biological assets on hand and profit before tax by $5.5m (31 January 2021: 15% increase /
decrease $2.1m).
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.
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 Group has insurance to cover some of the risks relating to the livestock.
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.
A 15% increase/decrease in estimated costs to sell would decrease/increase the fair value of biological assets on hand at balance date and profit before tax by $14.5m
(31 January 2021: 15% increase / decrease $15m). 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.
The Group is exposed to financial risks relating to the production of salmon stock including increasing climate change volatility, climatic events, disease and
contamination of water space.
10

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2021
9.RIGHT-OF-USE ASSETS
Land &
Building
Motor
Vehicles
Plant &
Equipment
UNAUDITED
31 July 2021
AUDITED
31 January 2021
UNAUDITED000000000$000$000
Carrying amount at 01 February or 01 July5,5893548676,8104,581
Additions- 235- 2352,413
Remeasurement2337- 240796
Depreciation for the period(602) (113) (238) (953) (980)
Carrying amount as at 31 July or 31 January
5,2204836296,3336,810
Cost 7,0379181,5979,5529,227
Accumulated Depreciation(1,817) (435) (968) (3,219) (2,417)
Carrying amount as at 31 July or 31 January5,2204836296,3336,810
10.INTEREST BEARING LOANS AND BORROWINGS
UNAUDITEDAUDITED
31 July 202131 January 2021
Current interest bearing loans and borrowings$000$000
Secured bank loans750750
Other borrowings7582,274
Total current interest bearing loans and borrowings
1,5083,024
Non-current interest bearing loans and borrowings
Secured bank loans39,25039,250
Total non-current interest bearing loans and borrowings
39,25039,250
11.FAIR VALUE OF FINANCIAL INSTRUMENTS
The following financial instruments of the Group are carried at fair value:UNAUDITEDAUDITED
31 July 202131 January 2021
Current derivative financial assets$000$000
Forward exchange contracts2,4104,509
Foreign exchange options559904
Total Current derivative financial assets2,9695,413
Non-current derivative financial assets
Forward exchange contracts1,05715,454
Foreign exchange options592900
Total Non-current derivative financial assets1,64916,354
Current derivative financial liabilities
Forward exchange contracts25494
Foreign exchange options4061
Interest rate swaps1,0671,491
Total Current derivative financial liabilities1,3611,646
Non-current derivative financial liabilities
Forward exchange contracts22618
Foreign exchange options212186
Interest rate swaps- -
Total non-current derivative financial liabilities438204
Valuation methods
Level 1: Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date
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. There were no transfers between Level 1 and Level 2 during the period ended 31 July 2021.
The carrying value of the BNZ loan drawing of $40m is considered a reasonable approximation of its fair value due to the short term maturities of the drawings. The
Group has the discretion to roll these short term drawings out within facility A ($20m) to 18 Oct 2022 , and within facility B ($20m) to 18 Oct 2023.
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 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)
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 Company has facilities with BNZ for $60m, secured by a general security deed over the assets of the Group. The expiry date of facility A of $20m is 18 October
2022, facility B of $20m expires on 18 October 2023, and facility C of $20m expires on 18 October 2024. At balance date $20m of facility A was drawn, $15m of facility
B was drawn and facility C was undrawn (as at 31 January 2021 total: $35m). The Company also secured a Business Finance Scheme Loan via BNZ for $5m (expiry
October 2025) that arose from the Government providing financial assistance following the pandemic virus Covid-19. At balance date the Business Finance Scheme
loan was fully drawn at $5m.
11

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2021
12.COMMITMENTS AND CONTINGENCIES
UNAUDITED
Capital commitments
Contingencies
Guarantees
13.CAPITAL AND RESERVES
UNAUDITEDAUDITED
Share capital
31 July 202131 January 2021
Issued shares000000
Ordinary shares138,986 138,986
Total issued shares
138,986 138,986
UNAUDITEDAUDITEDUNAUDITEDAUDITED
31 July 2021
31 January
2021
31 July 202131 January 2021
Movement in ordinary share capital000000$000$000
As at 1 February or 1 July138,986 138,986122,606122,606
Share issue for employee share scheme- - - -
Share issue recognised on repayment of employee loans- - - -
As at 31 July or 31 January
138,986 138,986122,606122,606
Shares held as treasury stock313232
Total shares outstanding at 31 July or 31 January
138,673138,754
Reserves
Foreign currency translation reserve
Hedge reserve
Retained earnings
Share based payment reserve
000000000000000000
LTI 201827/09/2018271- - (43) - 228
LTI 20195/11/2019251- - (38) - 213
Total share scheme
522 - - (81)- 441
Share allocation price for share schemes
LTI 2018$1.30$1.95$2.78-
LTI 2019$1.41$2.13- $2.20
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. No dividend was declared nor paid during the 6 months to 31 July 2021 (6 months to 31 July 2020: fully imputed interim dividend of $0.02 per share was
paid on 20 March 2020).
Share schemeGrant date
31 January
2021 shares
not yet
vested
New shares
issued to
custodian
Shares
forfeited to
treasury stockShares vested
31 July 2021
shares not yet
vested
* Fully vested in current year
Shares
allocated from
treasury stock
The estimated value of share options was determined using the Black-Scholes pricing calculator and is being amortised over the restrictive periods. The option cost is
treated as an employee expense with the corresponding credit included in the share based payment reserve. The inputs into the option pricing valuation model are the
share price of the Group at time of allocation and the compounded risk free interest rate.
Share scheme
The group has three guarantee facilities at 31 July 2021 totalling $131k (31 January 2021: $115k).
The Group has entered into agreements to purchase plant and equipment. As at 31 July 2021 the total commitment is $4,202k (31 January 2021: $1,629k).
The share based payment reserve relates to one long term incentive (LTI) scheme and two employee share ownership schemes. 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 subsequent to repayment of the loan balance remaining at
time of vesting.
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 Capital# of Shares
Employee
Group 4
The Group has a contingent liability at 31 July 2021 of $772k in respect of a fish transport contract requiring the Group to purchase three bulk tankers (including
modifications made in 2018 and 2020), should the fish transport contract be terminated early (31 January 2021: $826k).
Retained earnings represents the profits retained in the business.
The foreign currency translation reserve is used to record exchange difference arising from the translation of the financial statements of the foreign subsidiary.
Employee
Group 1
Employee
Group 2
Employee
Group 3
12

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2021
14.RELATED PARTY DISCLOSURES
Subsidiaries
New Zealand King Salmon Investments Limited has the following trading subsidiaries.
SubsidiaryCountry of Incorporation
The New Zealand King Salmon Co. LimitedNew Zealand100%
New Zealand King Salmon Exports LimitedNew Zealand100%
The New Zealand King Salmon Pty LimitedAustralia100%
New Zealand King Salmon USA IncorporatedUnited States of America100%
Transactions with related parties
UNAUDITEDUNAUDITED
31 July 202131 July 2020
Related party payments$000$000
Goods and services purchased from other related parties186181
Total related party payments
186181
Related party sales
Goods and services sold to related parties- -
Total related party sales
- -
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 parties
31 July 202131 January 2021
Current amounts owing to related parties$000$000
Other amounts owing to related parties(233) (233)
Total current amounts owing to related parties
(233) (233)
UNAUDITEDAUDITED
31 July 202131 January 2021
Amounts owing by related parties$000$000
Amounts owing by related parties- 3
Total amounts owing by related parties
- 3
UNAUDITEDUNAUDITED
Compensation of key management personnel of the Group
31 July 202131 July 2020
Key management personnel compensation$000$000
Short-term employee benefits954 878
Share based payment expense81 121
Post employment pension and medical benefits78 30
Total key management personnel compensation
1,113 1,029
At balance date Oregon Group Limited owned 40.02% (31 January 2021: 40.02%) and China Resources Ng Fung Limited owned 9.96% (31 January 2021: 9.96%) of
the shares in New Zealand King Salmon Investments Limited.
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:
The principal activity of The New Zealand King Salmon Co. Ltd is the farming and processing of salmon. The activity of New Zealand King Salmon Exports Limited,
The New Zealand King Salmon Pty Limited, and New Zealand King Salmon USA Incorporated is the distribution of salmon.
Equity Interest
13

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2021
15.DISAGGREGATION OF REVENUE
UNAUDITEDUNAUDITED
31 July 202131 July 2020
Revenue by Product Group$000$000
Whole Fish
40,05531,506
Fillets, Steaks & Portions
17,14213,342
Wood Roasted
6,2455,779
Cold Smoked
12,01311,927
Other
4,6404,462
Total
80,09567,016
UNAUDITEDUNAUDITED
31 July 202131 July 2020
Revenue by Brand$000$000
Ōra King26,98924,917
New Zealand King Salmon32,32321,907
Regal15,12715,307
Southern Ocean4,4793,870
Omega Plus1,1771,015
Total
80,095 67,016
UNAUDITEDUNAUDITED
31 July 202131 July 2020
Revenue by Market$000$000
New Zealand33,29428,806
North America29,77825,880
Australia5,0763,930
Japan6,0321,926
China3661,204
Europe2,5431,547
Other3,0063,723
Total revenue
80,09567,016
16.EVENTS AFTER BALANCE DATE
Covid-19
Open ocean consent
A hearing date has been established for the open ocean farming consent application in October 2021.
Dividend
Sales net of settlement discounts to two major customers for the 6 months period ended 31 July 2021 totalled $ 8.2m or 10.27% of total gross revenue, (6 months to 31
July 2020 one major customer totalled $8.6m or 12.92% of total gross revenue).
Following the confirmation of community transmission of the Covid-19 delta variant on 17 August 2021, the Government announced a range of alert level lockdowns
across New Zealand. Subsequent announcements were also made and at date of signing these financial statements the Auckland region is in alert level 3 with the rest
of the country in alert level 2. As noted in Note 2.d. the forecast assumptions in relation to the net realisable value remains reasonable.
No final dividend was declared in respect of the 6 months ended 31 July 2021 (7 month period to 31 January 2021: Nil).
14

---

Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)



93 Beatty Street, Tahunanui, Nelson 7011, New Zealand
+64 3 548 5714

contact@kingsalmon.co.nz

www.kingsalmon.co.nz

Results for announcement to the market
Name of issuer New Zealand King Salmon Investments Limited
Reporting Period 6 months to 31 July 2021
Previous Reporting Period 6 months to 31 July 2020
Currency NZD
NZ$ Amount (000s) Percentage change
Revenue from continuing
operations
$88,095 19.5 %
Total Revenue $88,095 19.5 %
Net profit/(loss) from
continuing operations
($5,596) (0.5)%
Total net profit/(loss) ($5,596) (0.5)%
Interim/Final Dividend
Amount per Quoted Equity
Security
$ nil
Imputed amount per Quoted
Equity Security
$ nil
Record Date N/A
Dividend Payment Date N/A
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.98 $1.04
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
No interim dividend was declared in respect of the 6 months
ended 31 July 2021.
Authority for this announcement
Name of person

authorised
to make this announcement
Grant Rosewarne
Contact person for this
announcement
Grant Rosewarne
Contact phone number
+64 27 246 0980

Contact email address
grant.rosewarne@kingsalmon.co.nz

Date of release through MAP

30 September 2021

Unaudited financial statements accompany this announcement.