NZK – NZ King Salmon Investments Limited FY24 Results
Market Announcement
27 March 2024
NZK ‐ NEW ZEALAND KING SALMON INVESTMENTS LIMITED ANNOUNCES FY24 RESULT
New Zealand King Salmon Investments Ltd (NZX & ASX: NZK) reports its financial performance for
the 12 month period ended 31 January 2024 (FY24). Key points include:
FY24 net profit for the year
of $28.5 million, compared to a net profit for the year of $1.9 million in
FY23.
FY24 pro‐forma EBITDA was a profit of $24.5 million, compared to an EBITDA loss of $2.7 million in
FY23.
Mortality expense reduced from $25.9m in FY23 to $12.6m in FY24.
Revenues
increased from $167 million in FY23 to $187 million in FY24 (an increase of 12%).
New Zealand King Salmon Chair Mark Dewdney said: “The second half of the year has seen a continuation of our
turnaround which started in FY23. Our new farming strategies have again assisted in reducing summer
mortality,
and we are continually looking at other ways to optimise our existing business. We are about to commence work
on the Blue Endeavor pilot which is an exciting milestone. Although the full‐year result is pleasing, and we have
been able to deliver on the commitments the Company made
during the FY22 rights issue, there is more work
to be done.”
New Zealand King Salmon Chief Executive Officer, Carl Carrington, said: “It's pleasing to deliver guidance, albeit
the year ended slightly weaker than our aspirations. As a result of the changes to our production plans in FY22,
we were aware
we would have a period of smaller fish in the last quarter of FY24. Unfortunately, the size of the
fish did create some challenges with export markets. The good news is we are now through this period and are
back to our normal size curve both now and in our
future production plans.”
Acknowledging the above, Carl noted, “We acknowledge we have had some challenges over the last couple of
years and now we are coming out the other side I really want to thank our loyal customers and wider
stakeholders who support what we do, and as Mark mentioned,
also acknowledge we have more work to do.”
In late February the Company also received our resource consent for the Blue Endeavour open Ocean farm (7km
north of Cape Lambert, in Cook Strait). This process has taken over 9 years, and millions of dollars that could
have been utilised elsewhere.
Carl noted “It’s great to finally have the consent, and we can now focus on the
next steps for the Blue Endeavour project. The focus for FY25 is to complete the monitoring (as required by
the consent) and to order the equipment for a pilot farm.”
The Board is providing
pro‐forma EBITDA guidance in a range of $26m ‐ $32m for FY25.
Authorised by:
Board of Directors of New Zealand King Salmon Investments Limited
For investor or analyst queries, please contact:
Carl Carrington, CEO, New Zealand King Salmon Investments Ltd, carl.carrington@kingsalmon.co.nz
Ben Rodgers, CFO and Company Secretary, New Zealand King Salmon Investments Ltd,
ben.rodgers@kingsalmon.co.nz
---
NZK
Results announcement
31 January 2024
Results for announcement to the market
Name of issuer New Zealand King Salmon Investments Limited
Reporting Period 12 months to 31 January 2024
Previous Reporting Period 12 months to 31 January 2023
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$187,106 12%
Total Revenue $187,106 12%
Net profit from continuing
operations
$28,452 <>%
Total net profit $28,452 <>%
Interim/Final Dividend
Amount per Quoted Equity
Security
Nil
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.36 $0.30
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
No final dividend was declared in respect of the year ended 31
January 2024.
Authority for this announcement
Name of person
authorised
to make this announcement
Ben Rodgers
Contact person for this
announcement
Ben Rodgers
Contact phone number 03 548 5714
Contact email address Ben.rodgers@kingsalmon.co.nz
Date of release through MAP
27/03/2024
Audited financial statements accompany this announcement. Pursuant to ASX Listing
Rule 1.15.3, New Zealand King Salmon Investments Limited confirms that it continues
to comply with the rules of its home exchange (the NZX Main Board)
---
Annual Report FY24
Overview ......................................................3
Aquaculture ................................................14
Sustainability ..............................................19
Our People, Culture & Community ..................27
Strong Brands .............................................36
Leadership & Corporate Governance ...............45
Financial Statements ...................................83
CONTENTS
ContentsContents
2
New Zealand King Salmon — Annual Report FY24
Contents
OVERVIEW
3
New Zealand King Salmon Annual Report FY24
Contents
Chair and
CEO Report
Rising to Meet the Challenges
This has been a year of significant evolution for New
Zealand King Salmon (NZKS). We have drawn a line under
the mortality experienced in 2021-22 and resized and
reset our Company to respond to this adversity. We are
incredibly proud of the way all parts of our Company have
risen to meet these challenges.
Some of the key evolutions this report will highlight
are; strengthening our leadership, our adapted farming
strategy and focus on fish health, our future in the open
ocean, and our commitments to sustainability from an
environmental, social and governance perspective.
We have three strong indicators that demonstrate we are
on the right trajectory - improved biological performance,
cost discipline, and record sales of our King salmon.
We look forward to continuing this solid progress into our
next fiscal year.
With a focus on resilience and a
strategic reset, we have re-positioned
our Company to succeed.
Carl Carrington
Chief Executive Officer
Mark Dewdney
Chair
We are incredibly proud of the way
all parts of our Company have risen
to meet these challenges.
4
New Zealand King Salmon — Annual Report FY24
OverviewContents
Strengthening Our Leadership
This year we have seen significant changing of the
guard in our Company. We welcomed a new Chief
Executive Officer (CEO), Carl Carrington, to our team
in August. The Board conducted an extensive search to
ensure we had the right CEO for the Company’s future.
Carl Carrington, with over 20 years of experience in the
food and drinks sector, and more recently six years as
CEO of Moana New Zealand, has proudly taken up
this mantle.
We would like to recognise the leadership of Graeme
Tregidga who as acting CEO, led the Company through
a challenging set of circumstances. Under Graeme’s
leadership, the business settled and refocused, and
performance improved. The Company acknowledges the
contribution that Graeme continues to make as Chief
Commercial Officer.
Mark Dewdney stepped in as our new Chair in June
2023. Mark has a strong background in agribusiness,
international sales and distribution, manufacturing,
and supply chain industries. Having had 25 years in
management roles both in New Zealand and Asia,
in 2017 he decided to commit to a future path in
governance. Mark is currently a Director of The Tatua
Dairy Co-operative.
We would like to acknowledge John Ryder who departed
as Chair after a 14-year tenure with our Company.
During his time the business has come a long way,
and John was instrumental in guiding it through the
disruptions of the Covid-19 pandemic and the mortality
event. We acknowledge the commitment and passion
for the business brought by John Ryder over the years.
Long-serving Director, Paul Steere, will retire from the
Board at the end of March this year. Paul has been part
of the NZKS business for three decades. He began as
the Company’s inaugural Chief Executive Officer and
following his stepping down in 2009, Paul joined the
Board as an Independent Non-Executive Director. We
would like to extend our deepest gratitude to Paul Steere
for his dedicated service to the Company.
Paul Munro joined the NZKS Board as an Independent
Non-Executive Director on 1 March 2024. Post Paul
Steere’s retirement, Paul Munro will commence as
Chair of the Audit, Finance and Risk Committee. Paul
Munro is an accomplished finance professional with
extensive experience, including 24 years with Deloitte
as a Corporate Finance Partner, in addition to holding a
range of governance roles.
While this represents some significant changes, we are
confident we have the right leadership composition at
our Governance, Executive and Senior Leadership levels
to strategically guide us into the future.
We would like to recognise the
leadership of Graeme Tregidga who as
acting CEO, led the Company through
a challenging set of circumstances.
5
New Zealand King Salmon — Annual Report FY24
OverviewContents
Adapted Farming Strategy and
Focus on Fish Health
At the core of our adapted farming strategy is fish
health and welfare, and it has been pleasing to see
the early results from these changes. Our farming
model was modified to minimise the exposure to
warmer waters over the summer period. This has
meant that in the Pelorus Sound, Waitata is the
only farm to maintain operations across summer
and continues to grow fish for harvest across the
cooler months. The remaining three Pelorus farms;
Forsyth Bay, Kopaua and Waihinau remain fallow
year-round.
The first summer operating under this new
approach, being the 2022-23 summer, was
successful. As this report is written, we are
approaching the same seasonal peak temperatures
for the 2023-24 summer period, and to date the
revised farming model is continuing to perform
as expected.
Summer mortalities maintained an improved
outcome trend as illustrated in the graph, and the
mortality cost decreased from $25.9 million in FY23,
to $12.6 million in FY24.
2022/232023/242021/222020/212019/202018/192017/18
01
DEC
15
DEC
29
DEC
12
JAN
26
JAN
09
FEB
23
FEB
09
MAR
23
MAR
MT
0
Summer mortality this year compared
to last six years
6
New Zealand King Salmon — Annual Report FY24
OverviewContents
Complementing this approach, the business continued
its seasonal harvest strategy at our Waitata farm. Fish
are introduced to sea once water temperatures cool post
summer, they are then harvested prior to the summer peak.
These are smaller fish but nevertheless make a positive
contribution to our overall harvest profile. We also utilise
a tow model to transfer fish from the cooler Tory Channel
to the Queen Charlotte Sound after the warmer summer
months.
These may appear as simple adjustments, however there
is a great deal of planning and executional skill required
across our hatcheries, freshwater operations, and sea farms
to successfully implement these changes. We acknowledge
the efforts and vigilance of our aquaculture team, feed, and
services suppliers in enabling this new model.
The business continues to invest in research, particularly
around breeding for greater thermotolerance. Early trials
under tightly controlled conditions at the Cawthron Institute
facilities are producing encouraging results. We are now
extending the trials to real conditions in a sea pen. On a
cautionary note, breeding programmes take several years
to flow through to commercialised outcomes, however, the
journey is well underway.
We acknowledge the efforts and
vigilance of our aquaculture team,
feed, and services suppliers in
enabling this new model.
7
New Zealand King Salmon — Annual Report FY24
OverviewContents
Our Future in the Open Ocean
We have now received all permissions necessary to proceed
with our open ocean site named ‘Blue Endeavour’. This
draws a line under what has been a nine-year journey with
significant costs incurred. However, the importance of this
moment should not be overshadowed by the challenges
overcome to attain this space. Blue Endeavour will be New
Zealand’s first open ocean salmon farm. This is a significant
opportunity for New Zealand, as we are uniquely positioned
as world leaders in King salmon farming.
We are excited about the further resilience and growth
opportunities Blue Endeavour provides, however we need to
walk before we can run.
The Blue Endeavour project now enters a data collection
phase to establish baseline data for benthic, water column,
seabird, and marine mammal parameters. Once data
collection is completed, we will test infrastructure and
farming operations by placing a pilot scale farm on the site
and introducing fish to these two pens. This will help us
understand how both the technology and fish perform
in the Cook Strait conditions, enabling us to determine
how best to operate in this new environment. The testing
phase will continue for at least two years. This will provide
confidence in our ability to progressively scale the farm
towards its annual capacity of approximately 10,000
metric tonnes.
The rate at which we scale up will be influenced by the
pilot farm results and our view of the market demand
outlook at the time. Full scaling beyond a few thousand
tonnes will require investment in new infrastructure
including expanded processing capacity, vessels for fish
transfer and harvest, as well as the expansion of hatchery
and freshwater facilities for smolt supply. The Board
and Management are continuously working through the
detailed planning and business case evaluations required
for operationalising Blue Endeavour.
However, we know we cannot do this alone; we will
continue to engage with a range of stakeholders including
research entities, Government, Iwi and other interested
parties, to support the future growth of aquaculture.
8
New Zealand King Salmon — Annual Report FY24
OverviewContents
Our Sustainability Journey
There is increasing consumer awareness on sustainability,
and we need to view sustainability through our carbon
footprint and broader Environmental, Social and
Governance (ESG) considerations. Ensuring the seafood
industry is well positioned to meet these sustainability
demands will be critical. This is our first year of reporting
under the Aotearoa New Zealand Climate Standards.
Preparing the baseline data has been a significant
journey and one that provides rich insights that we will
use to build plans for targeted improvements.
Positive Earnings Progress
The full year result has seen a continuation of our
turnaround which started in FY23. Underpinning our FY24
net profit for the year of $28.5 million, was the success
over the 2022-23 summer period of the new production
model, the focus on customer/product mix, and cost
discipline. The full year FY24 pro-forma EBITDA profit is
$24.5 million, compared to a pro-forma EBITDA loss of
$2.7 million in FY23.
Revenues increased from $167 million in FY23 to $187
million in FY24 (an increase of 12%).
Earnings guidance range of pro-forma FY25 EBITDA is set
at $26 million to $32 million.
Key Lessons Learned
Aquaculture is an industry that requires both patience
and caution; getting runs on the board and building
confidence as we go into the next phase. Farming the
sea requires five-dimensional thinking; achieving the
right balance between the natural world, stakeholder
expectations, economic conditions, political context,
and future technological innovations. Finding that
‘sweet spot’ between all five axes is an ever-moving
challenge, but one that makes aquaculture so
fascinating and rewarding.
The first critical lesson is around resilience. Both in the
sense of respect for the resilience of this Company,
which has existed for over 35 years and weathered many
storms, and in the sense of the importance of building
operational resilience into the future.
The other lesson is around the importance of building
quality and meaningful relationships. Without people,
we have no business. Whether it is our own people, our
communities, Iwi, customers and beyond. Taking people
along with us on our journey into the future, will help
positively shape our Company’s trajectory.
Taking people along with us
on our journey into the future,
will help positively shape our
Company’s trajectory.
9
New Zealand King Salmon — Annual Report FY24
OverviewContents
Outlook
We are optimistic that the economic outlook is
stabilising, although inflationary pressures are lingering.
Considerations for our sector include multifactorial
impacts of a changing climate, a high inflation
environment, the need for secure and ethical supply
chains, increased awareness of provenance, increasing
expectations of transparency and corporate responsibility,
and preserving our social license. Ensuring we can rise to
meet these challenges as a sector will be essential.
As for the wider seafood industry outlook, the change
of government could stimulate further investment
and changes to the regulatory environment. Anything
that can provide greater certainty and build investor
confidence, while simultaneously maintaining our strong
reputation as a sustainable and healthy industry, will be a
win for aquaculture.
Demand for our Ōra King and Regal Salmon brands
remains strong with demand continuing to outstrip
supply. Our target markets of New Zealand, Australia,
North America, Japan, and China, have substantial
growth potential. King salmon as a species is a premium
niche product. New Zealand annual production is circa
14,500 metric tonnes with only a very small amount of
farmed King salmon available from elsewhere globally.
By comparison, annual farmed production of Atlantic
salmon is circa 2.8 million tonnes. Total annual sales
of salmon (all species) is estimated at USD 30.8 billion
in 2023 and forecast to grow to USD 37.4 billion by
2027 (3.9% CAGR)*. Ōra King and Regal King salmon
are recognised by chefs and discerning consumers
the world over for their premium taste and texture.
Maintaining quality and brand recognition, underpinned
by provenance and sustainable practices, is vital for
continuing to grow the value per kg of King salmon
relative to Atlantic salmon over the coming years.
* Ref. Renub Research “Global Salmon Market Forecast 2023-27”
Summary
It has been a year of steady progress operating the
adapted farming model for the second consecutive year.
We recognise that although two successful years are
encouraging, there is more work required to further build
our resilience. We are excited to have the Blue Endeavour
farm licence issued and to be moving towards pilot trials.
Equally, we are excited for the improvements to resilience
and fish health that Research and Development (R&D)
offers. Patience, caution, and focus on doing the right
things well, will underpin a promising future.
We have many to thank for our success over this year
- our team of over 440 dedicated team members who
are the backbone of this company, our customers for
their continued loyalty to our product, Iwi, communities,
and stakeholders who enable us to operate, and our
shareholders who continue to invest and believe in our
Company.
Together, we can overcome challenges, embrace new
opportunities, and achieve even greater milestones.
The annual report is dated 26 March 2024 and signed on behalf
of the Board by:
Paul Steere
Chair of Audit, Finance and
Risk Committee
Mark Dewdney
Chair
10
New Zealand King Salmon — Annual Report FY24
OverviewContents
Salmon
Bites
METRIC TONNES HARVESTED
~6,200
REVENUE OF
$
187
million
NET PROFIT
AFTER TAX OF
$
28.5
million
PRO-FORMA
EBITDA
$
24.5million
TOTAL SALES
NEW ZEALAND
64%
36%
EXPORT
TEAM MEMBERS
440
INTERNAL
PROMOTIONS
18
EMPLOYEE
ENGAGEMENT
SCORE
79%
BEACH
CLEAN UPS
271
kg
OF WASTE
COLLECTED OVER
49
STAR BAP CERTIFIED4
DRIVEN ACROSS
3 ELECTRIC
VEHICLES
~90,000
km
CHARITIES / LOCAL
ORGANISATIONS SUPPORTED
20+
THE LARGEST
ŌRA KING
HARVESTED
TO DATE
22.8
kg
Blue Endeavour
ALL PERMISSIONS GRANTED FOR
NZ’S FIRST
OPEN OCEAN
SALMON FARM
11
New Zealand King Salmon — Annual Report FY24
OverviewContents
GAAPPro-Forma
1
NZ$000sFY24FY23% chg. FY24FY23% chg.
Volume Sold (t)5,899 5,837 1%5,899 5,837 1%
Revenue187,106 167,131 12%187,106 167,131 12%
Gross Margin65,378 30,623 113%49,591 24,035 106%
Gross Margin %35%18%27%14%
EBITDA46,990 11,698 <>24,475 (2,665)<>
EBITDA %25%7%13%-2%
EBIT39,405 3,276 <>16,890 (11,087)<>
NPAT28,452 1,891 <>12,242 (8,450)<>
Performance Highlights
Key Drivers
• The long salmon life cycle (24 - 31 months) highlights
the lag between current decisions and outcomes. This
is evidenced by the changes in the farming production
model now showing up in the financial results, with
mortality continuing to track within management’s
expectations (FY24 $12.6m v FY23 $25.9m).
• Price increases, product optimisation, and market
selection delivered a record $187m in revenue, which
helped offset increases in key input costs including
feed and labour. Sales were also adversely impacted by
a temporary reduction in fish size in Q4FY24 (due to
the change in the farming production model) which
impacted export demand, this is not forecast to
repeat in the future.
• Financial position remains strong following the
recapitalisation of the business in FY23, this provides a
solid platform for future growth initiatives.
• GAAP results were positively impacted by a fair value
uplift in assets of $15.8m (FY23 of $6.6m) and a
continued unwind of early close out of FX contracts
$6.7m (FY23 $7.8m) which occurred in FY21 and FY22.
Group Financial Performance
1
comparable numbers restated as NZKS is no longer reversing the impacts of NZ IFRS 16 leases as previously communicated
12
New Zealand King Salmon Annual Report FY24
OverviewContents
Fish Performance
• Fish performance remains the core focus for the business.
FY24 saw the adapted farming strategy complete its first
full financial year. This strategy of having the majority of
stock in the Tory Channel over summer and avoiding the
warmer water sites has proved successful to date with
significantly reduced mortality compared to previous
years. This improved performance has continued into FY25.
• The FY24 harvest volume was up slightly on FY23. Further
increases are forecast for FY25 as the new strategy is
optimised. The revised longer term harvest biomass of our
farmed sites sits at ~6,800 to 7,200MT.
• Feed prices remain high and volatile due to raw material
ingredients and global geo-political tensions.
• The second year of thermotolerance trials with our
broodstock is complete. The next steps are for the trial to
be replicated at a sea farm in FY25. As with all breeding-
based initiatives, this is a long-term project.
Biological Performance
FY24FY23% chg.
Harvest Volume (MT)6,238 6,014 4%
Average Harvest Weight (Kg)3.24 3.12 4%
Feed Conversion Ratio (FCR)1.74 1.66 (5%)
Closing Livestock Biomass5,379 4,620 16%
Feed Cost ($ / Kg of feed)3.38 3.06 (10%)
1
comparable numbers restated as NZKS is no longer reversing
the impacts of NZ IFRS 16 leases as previously communicated
-75
-50
-25
0
25
NZ$m
-73.2
28.5
FY20FY21FY23FY22FY24
18
-7.1
1.9
NZ$m
-10
0
10
20
30
26.710.98.7
-2.7
FY20¹FY21FY23FY22FY24
24.5
GAAP NPAT
Pro-Forma Operating EBITDA
13
New Zealand King Salmon — Annual Report FY24
OverviewContents
AQUACULTURE
14
New Zealand King Salmon Annual Report FY24
Contents
It has been a year of consolidation
for our aquaculture team as we
concentrated on fully implementing
the adapted farming strategy and
maintaining core operations.
Aquaculture
Fish health and welfare remains a priority;
key areas of focus include:
• Focusing on the cooler Tory Channel water over the
critical summer months
• Relocating stock from the Tory Channel to the
Queen Charlotte Sound post-summer for grow out,
and harvest prior to the next summer
• Seasonal harvest of smaller fish at Waitata
• Vaccination programme
The change in farming model, which avoids having
fish at warmer/low flow sites over the summer
months, has seen a positive reduction in mortality
which is consistent with our expectations. This is
despite the most recent summer being one of the
warmest on record*.
Total Mortality Biomass
The adapted farming strategy was successfully repeated
to add volume and make better use of our Waitata farm,
whilst mitigating mortality.
FY19FY20FY21FY22FY23FY24
TOTAL MORTALITY BIOMASS
0
700,000
1,400,000
2,100,000
2,800,000
3,500,000
MT
*View Climate Summary
15
New Zealand King Salmon — Annual Report FY24
AquacultureContents
Vaccination
Vaccine development and deployment continued and will
remain an ongoing focus with all NZKS commercial stock
now vaccinated before entering sea farms. A semi-automatic
vaccination machine arrived in late FY24 and has been installed
and commissioned in early FY25. In addition to improvements
in animal welfare through a reduction in fish handling, the
machine will deliver significant labour and time efficiencies in
this area.
Breeding for Thermotolerance
Complementing our adapted farming strategy is the ongoing
development of our breeding programme.
We are currently in year two of a three-year project to develop
and test the methodology that will allow targeted breeding of
King salmon in elevated water temperatures. This collaborative
project, supported by the Sustainable Food and Fibre Futures
fund, administered by the Ministry for Primary Industries (MPI),
is helping develop strong science for adaption and increased
resilience in the face of a changing climate.
Initial trials conducted by the Cawthron Institute have
delivered promising outcomes to date. Results show favourable
thermotolerance heritability values with significant family
differences, meaning some family groups possess the ability to
handle warmer water significantly better than others. The next
step will see us benchmark the trial facility work with on-farm
data. Although the initial trial results are promising, breeding for
change is a long-term project and we anticipate incorporating
thermotolerance into our breeding programme and spawning
activities from 2025 onwards.
New Zealand King Salmon’s
Selective Breeding Programme
Our classical breeding programme has been
developed over 30+ years, and is the longest
running, commercial King salmon breeding
programme in the world. Selectively breeding
our King salmon for desirable traits, allows
us to improve natural genetic strains that
yield better performing fish populations, in
addition to delivering the critical scientific
rigour to our unique breed of King salmon.
To date, the programme has
encompassed 10 generations of salmon,
and ~3000 families.
Sustainability Action
Supporting our Native Wildlife
In response to a request from the
Department of Conservation, we provided
smolt as an emergency feed supply for NZ’s
critically-threatened bird Tara Iti, who had
their fish supply wiped out in the Auckland
flooding events of 2023.
16
New Zealand King Salmon — Annual Report FY24
AquacultureContents
Blue Endeavour
Growth potential
OF KING
SALMON
PRODUCED
PER YEAR
OPPORTUNITIES
IN TE TAU IHU
REVENUE
PER YEAR
10,000
Employment
$
300+
tonnes
UP TO
POTENTIAL FOR
million
Watch Blue Endeavour video
We have spent over nine years researching and planning with
industry experts to develop New Zealand’s first open ocean
salmon farm which we have named Blue Endeavour. With all
permissions granted, we now enter a new phase of our journey
and a new frontier of aquaculture in New Zealand.
Research and data collection
Work is already underway to capture
baseline data for external parameters
– marine mammals, seabirds, benthic
and water column.
Blue Endeavour pilot scale farm
Installed to test infrastructure and
farming operations over a two year
period with ongoing assessment of data
related to external parameters and pilot
farm operations.
Development and implementation
A staged approach to the scale up of
Blue Endeavour.
Phase 1
Phase 2
Phase 3
Data Collection
Pilot Farm Test
Data Assessment
Develop & Implement
17
New Zealand King Salmon — Annual Report FY24
AquacultureContents
families of salmon
assessed for
thermotolerance
heritability
the largest Ōra King
TYEE harvested to date
A successful and crucial
repair to Tentburn
freshwater culvert, future
proofing the site
Dane Kieser, Smolt Production
Manager awarded global
recognition from Hatchery
International in the ‘Top 10
under 40’ category
260
22.8
kg
Blue Endeavour
All permissions granted for
NZ’s first open ocean
salmon farm
18
New Zealand King Salmon Annual Report FY24
AquacultureContents
SUSTAINABILITY
19
New Zealand King Salmon Annual Report FY24
Contents
Sustainability
“Fish farming holds tremendous promise
in responding to surging demand for
food which is taking place due to global
population growth”.
Ref: Food and Agriculture Organisation of the United Nations,
State of World Fisheries Report
Environmental, Social and Governance
We are proud to produce a healthy, nutritious, and high-
quality protein, and firmly believe that farmed salmon has
a key role to play in sustainable and resilient food systems.
As a primary sector company, we are fundamentally
dependent on the natural environment. NZKS is well
versed in adapting our business to a changing climate,
and we are also mindful of the importance of maintaining
a high-level of focus on this. Our ability to adapt and look
to the risks and opportunities that climate change may
bring to our business is integral to our future resilience,
and is something that leadership acknowledge and are
focussed on. We also acknowledge our own operations,
as with any activity, have an impact on the environment,
and we are continually looking at how we can reduce
our impact within our operational constraints. We are
moving towards embracing Environmental, Social and
Governance (ESG) principles and ingraining these in our
corporate culture to guide decision making.
20
New Zealand King Salmon — Annual Report FY24
SustainabilityContents
Environmental Responsibility
At NZKS we are committed to understanding
our impact on the environment and to look for
ways to reduce our impact within our operational
constraints. As part of this, we monitor our
environmental impact annually to stringent
consenting requirements. We are also committed
to better understanding our carbon footprint and
potential pathways to reduce our carbon impact.
Social Impact
We believe our business has a responsibility to positively
impact the communities in which we operate. Whether
it’s through developing a healthy, nutrient-rich
product for our customers, supporting local suppliers,
promoting diversity and inclusion within our workforce,
or engaging in community sponsorships and events, we
are committed to growing healthy relationships and
communities. Details of our social impact initiatives can
be found in the Our People, Culture and Community
chapter on page 27.
Governance Excellence
We are committed to upholding the highest
standards of corporate governance, ensuring
fairness, honesty, and ethical behaviour in all our
interactions. Our Board and Executive Leadership
set the standard in providing effective and
accountable management and oversight of NZKS,
ensuring ethical conduct and transparency. Read
our Corporate Governance policies on page 45.
21
New Zealand King Salmon — Annual Report FY24
SustainabilityContents
Aotearoa New Zealand Climate
Reporting Standards
NZKS will release our first Climate-Related Disclosures
(CRD) for this financial year in May 2024. The introduction
of the Aotearoa New Zealand Climate Standards,
released by the New Zealand External Reporting Board
(XRB) in December 2022, has created a framework to
support NZKS in formalising our work towards building
a sustainable future for both the environment and our
business.
With the business now steadied and producing positive
results, NZKS has been able to increase our focus on our
journey to a resilient, sustainable future. A key project
delivered as part of this sustainability journey, was
building our base year of carbon emissions for Scope 1, 2
and 3 emissions. This has been a significant undertaking
and we have engaged with external consultants to
support us in this process; we partnered with
thinkstep-anz to identify our carbon inventory streams,
and EY to perform certain agreed procedures around our
processes around the collation of our carbon inventory.
The EY procedures were carried out in preparation for
providing limited assurance over our emissions reporting
in FY25. We engaged with ESP to collate our carbon
inventory using BraveGen, their carbon management
software. With the help of BraveGen we can measure,
monitor, and track carbon emissions across our business.
This software also has the ability to support us in a
transition plan for emission reduction.
The NZKS Climate-Related Disclosures can be found
on our website, no later than 31 May 2024.
NZKS has been able to increase our
focus on our journey to a resilient,
sustainable future.
View NZKS Climate-Related Disclosures
22
New Zealand King Salmon — Annual Report FY24
SustainabilityContents
Improvement by Design
We recognise the critical need to rethink traditional linear
production models and embrace circularity as a guiding
principle for sustainability and resilience. By adopting
circular thinking, we aim to turn our organisational
challenges into opportunities for positive change. Circular
thinking in the context of our organisation involves
redesigning processes, products, and systems to minimise
waste, maximise resources and promote regeneration.
A strategic focus of our circular journey has been on whole
fish utilisation. We have funded, and are in the process of
commissioning, an ensilage plant to capture and utilise our
remaining organic waste streams. Once operational, our
goal for this facility is to allow us to convert salmon waste
streams currently sent to landfill, into fish silage for liquid
fertiliser and biogas production. This project is another
important step in transitioning towards a low emissions
and circular economy.
Sustainability Action
End-of-Life Solution for
Single-Use Plastic
In collaboration with
our service provider
Office Max and
resource recovery
organisations All
Heart NZ and
Critical, we took
part in a pilot
scheme to find
a diversion strategy for
single-use Personal Protective Equipment
(PPE) used in our processing operations.
Once destined for landfill, this PPE has
been transformed into several tabletops
which are now installed throughout our
business. Finding circular, end-of-life
solutions for single-use plastic remains
an ongoing focus.
By adopting circular thinking, we aim
to turn our organisational challenges
into opportunities for positive change.
23
New Zealand King Salmon — Annual Report FY24
SustainabilityContents
Packaging
Packaging plays a crucial role in ensuring food safety for
our consumers. We focus on delivering our product in
the freshest, highest quality condition, while maintaining
nutrient integrity. Good packaging supports the reduction
of food waste, helps us deliver our product to a broader
customer base, and supports traceability.
As a signatory to the New Plastics Economy Global
Commitment, NZKS has faced significant challenges in
reaching our goal of 100% of plastic packaging to be
reusable, recyclable, or compostable by 2025. However,
we remain committed to working on projects to improve
the percentage of recyclable packaging across our
organisation. Projects include replacing gel pads with
water pads where possible, and transitioning from our
current non-recyclable, vacuum-packed packaging
Sustainability Action
Go Green Fund
This internal initiative provides an
opportunity for NZKS team members
to make positive changes to the way
we operate and share ideas on how we
can move towards a greener future. This
fund, which is supported by our service
provider Office Max, has contributed to
the successful delivery of initiatives such
as an end-of-life solution for PPE; and the
installation of filtered, plumbed in, no-fill
water coolers which have reduced plastic
bottles from the business.
material, to a recyclable soft plastic. Although
in acknowledging we will not meet our previous
commitments by 2025, the progress we have made
to date, and our future planned work, shows our
commitment to continue to reduce the footprint of
our packaging.
Recognising Sustainability
To independently verify our sustainable operating
practices, we are regularly audited and assessed by
expert third-party organisations.
We also work closely with a range of global and local
organisations to improve sustainability practices
across our organisation.
24
New Zealand King Salmon — Annual Report FY24
SustainabilityContents
Four-star rating awarded for the
sixth consecutive year from Global
Seafood Alliance, Best Aquaculture
Practices (BAP) programme – the
highest designation in the programme
Modern Slavery
training developed
and delivered to
24 team members,
including senior
leadership and
procurement teams
of fresh fruit
delivered each week
to team members
112
kg
driven across 3
electric vehicles
~90,000
km
STAR BAP CERTIFIED4
25
New Zealand King Salmon Annual Report FY24
SustainabilityContents
50
40
30
20
10
Beef
Lamb
Cheese
Fish
Poultry
Eggs
King Salmon (NZ)
Oysters
Tofu
Mussels
Pulses
Nuts
A Verified Measure for Climate Impacts
Our organisation participated in a comprehensive,
industry-wide Life Cycle Analysis (LCA) of New Zealand-
farmed King salmon, facilitated by the Ministry for
Primary Industries (MPI).
LCA is a method to measure and evaluate the
environmental impacts associated with a product,
system or activity, by assessing the energy and materials
used and released to the environment over the life cycle.
Results from the industry-wide study show that New
Zealand-farmed King salmon has a lower carbon
footprint compared to the global average of other animal
proteins. It also found that New Zealand farmed King
salmon sold domestically, has a similar carbon footprint
to eggs, poultry and other farmed fish.
This LCA provides us with key insights into the benefits
and trade-offs associated with King salmon production,
in addition to identifying hotspots which will support and
inform decision making and transition opportunities for
lowering carbon emissions.
Carbon Footprints
of Dietary Proteins
(farming – retail only)*
Read the full LCA report
Sustainability Action
Worldwide Average
New Zealand Average
*Ref: Data from Figure 0-3: Carbon footprints of different
dietary proteins on the global market – production to retail only.
LCA Report – King salmon from New Zealand. V1.6, May 2023
Kg CO₂ / 100g
Protein
26
New Zealand King Salmon — Annual Report FY24
SustainabilityContents
OUR PEOPLE,
CULTURE &
COMMUNITY
27
New Zealand King Salmon Annual Report FY24
Contents
Long-standing aquaculture team member
Steve Roper has been with NZKS for 30 years.
Our People and
Culture
Our team of over 440 dedicated
individuals are the key to our Company’s
success; we recognise the need to
not only attract new talent, but also
retain existing talent, and continuously
support them in their professional and
personal development.
Creating a stable environment for our people was
paramount throughout FY24 as we focussed on rebuilding
team member confidence and engagement levels, and
fostering a positive, forward-thinking culture, whilst also
working to ensure our employer brand is aligned with our
goal of attracting the right people with strong skills into
our business to move us into the future.
Capability Development and Training
Although challenging during FY23, investment in the
development of our people recovered in FY24. Our online
learning platform Go1 experienced high levels of usage
with over 480 courses completed. Training specified by
our Resource Management Plan (RMP) was successfully
delivered during the year with 360 processing team
members taking part in nine courses specified by the
RMP, such as food safety, allergens, and health & safety,
equating to over 3600 hours of learning completed.
Leadership training continued with 45 team members
completing a two-day interactive video-based
presentation and personal impact course. In addition,
sessions on high performing teams, conflict resolution,
effective collaboration, and developing a leadership
presence, were also delivered to managers across the
Company.
With a new CEO on board, we engaged an external
facilitator for leadership training with the Senior
Leadership team focusing on collective leadership and
one-on-one sessions, these will continue throughout FY25.
Mental wellbeing and wellness were also topics of focus,
and at the end of the financial year we had trained
over 350 people in our bullying and harassment policies,
ensuring our team members are better protected from
inappropriate treatment and the risk of bullying. This
will remain an ongoing focus as we work to implement a
revised wellbeing strategy in FY25.
28
New Zealand King Salmon — Annual Report FY24
Our People, Culture & CommunityContents
Team members at 2023 Christmas function
Nurturing Talent and Recognising Excellence
In addition to training and development, we promoted
18 team members into leadership positions or roles
with significant influence throughout FY24, part of our
commitment to nurturing and developing existing talent.
This will continue throughout FY25 with the reintroduction
of a range of programmes including leadership capability,
succession planning, remuneration strategy, and working
on any gender pay gap actions.
Our commitment to recognising everyday excellence
continues with 173 individual Way We Work nominations,
59 team Way We Work nominations, and 53 Positive
Safety Behaviour nominations received through our peer
recognition scheme. Resulting in over $12,000 worth of
prizes awarded to individuals and teams throughout the
business.
Team Member Engagement
We believe that an engaged team is the driving force
behind our achievements; engaged team members
result in enhanced productivity, improved retention,
increased innovation and creativity, and greater
customer satisfaction. Therefore, we work hard to
maintain a high level of engagement and emotional
commitment to our business.
Engagement initiatives aim to ensure our team
members feel connected to their colleagues, their work,
and our business goals and values. This is achieved
through celebrating success and ensuring we clearly
communicate organisational strategies. With diversity
and inclusion at the heart of our culture, we recognise
national days and weeks such as Māori Language Week
and Mental Health Awareness Week. In FY24 we took
part in several fundraising events such as pink ribbon
breakfasts and pink shirt day, in addition to hosting a
number of company-wide barbecues and CEO lunches
with team members across the business.
Employee engagement is assessed through a
confidential annual engagement survey. With an 83%
response rate, we are pleased to have sustained a high
score of 79% through one of the Company’s most
challenging times; highlighting the commitment and
dedication to our people and culture.
We believe that an engaged
team is the driving force
behind our achievements.
29
New Zealand King Salmon — Annual Report FY24
Our People, Culture & CommunityContents
Health, Safety & Wellness
This was a year of ‘refresh and refocus’ in the health,
safety and wellbeing space. Our focus on critical risk
management and control continues, and our safety
strategy has evolved to create a culture where we truly
look after each other, along with attention to actual
work completed against perceived work completed.
This aim of ensuring alignment between expectation
and actualisation is being underpinned by a change in
our health, safety and wellbeing resources.
The appointment in FY24 of two specialist health,
safety and wellbeing advisors, one with knowledge
and background in processing operations, and one
with knowledge and background in aquaculture
operations, has resulted in a more comprehensive
understanding of what happens at an operational
level. Several operational safety projects targeted at
some of our most critical risk areas were successfully
delivered in FY24, including: lockout, tag out; confined
spaces; winches; working from heights; contractor
management; mobile plant; and electrical safety.
Sustainability Action
Modern Slavery Statement
We submitted our third Modern Slavery
Statement, reporting under Australia’s
Modern Slavery Act 2018. This statement
sets out the steps we have taken, and
continue to take, to prevent modern-day
slavery in our operations and across our
supply chain. Modern slavery remains
a challenging area for our industry, we
will continue to monitor and assess our
high-risk suppliers, whilst also ensuring
our team is equipped with the knowledge
and tools required to recognise and
tackle it.
Our safety strategy has evolved to
create a culture where we truly look
after each other
Read our Modern Slavery Statement
30
New Zealand King Salmon — Annual Report FY24
Our People, Culture & CommunityContents
4000+
interactions
with team members and our
community through a variety
of engagement initiatives
79% employee
engagement score
achieved
3600+ hours
of RMP-specified
training completed
285 nominations
through our peer
recognition schemes
5.8% increase
of the lowest wage, in
recognition of increases
to the cost-of-living
internal
promotions
Governance
Changes in how our Board engages with health, safety
and wellbeing through changes to our Health & Safety
and Food Safety Board Sub Committee, as well as the
updates to our risk register, resulted in a more targeted
oversight of health, safety and wellbeing from our
Directors in FY24. This, combined with greater Board
member visibility, has allowed for improvement in Board
due diligence in the health, safety and wellbeing arena.
Long-Term Injury Frequency Rate (LTIFR)
Our LTIFR, which looks at the number of lost time
injuries as a factor of hours worked, continues to be
an area of focus. We finished the year with a LTIFR of
28.5. Leadership are focusing on better management
of workplace absence by the usage of early intervention
and the possibility of alternative duties. It is well
understood that working with medical professionals
and the injured person to return them back into the
workplace promptly on restricted or alternative duties, is
a key part of a more effective and quicker rehabilitation
and return to normal work.
18
Team members at
2023 Christmas
function.
31
New Zealand King Salmon Annual Report FY24
Our People, Culture & CommunityContents
Our Communities
We are proud to call Te Tauihu o Te
Waka-a-Māui (Top of the South) home,
and we’re committed to having a positive
presence within our communities.
Although our business has a global reach, we will always
remain proudly local. We know that what truly makes our
King salmon unique is where it comes from - from the
natural environment, to the communities that work for,
with, and around us.
Our Commitment to the Community
Contribute to regional
economic development
and support local
sectors and
suppliers
Support youth
development to
improve life in the
community
Be a good neighbour
and community
partner
Build meaningful
and enduring
relationships with
mana whenua
Produce the
world’s finest salmon
and make our
community proud
Participate in flagship
local food and
wine events
32
New Zealand King Salmon — Annual Report FY24
Our People, Culture & CommunityContents
Sponsorships and Donations
Fiscal responsibility during our business recovery period
has meant a reduction in our sponsorship budget in FY24.
However, we maintained a supportive presence in our
communities, including sponsorship of key environmental
and social initiatives and participation in local events.
Environment
— Kaipupu Wildlife Sanctuary
Safety & Wellbeing
— Nelson Tasman Rescue helicopter
Community Food & Cultural Events
— Havelock Mussel and Seafood Festival
— Picton Maritime Festival
— Marlborough Wine & Food Festival
— Seafood Saturday
— Multicultural Nelson Tasman festival
Youth Support & Community Initiatives
— Big Brothers Big Sisters
— Graeme Dingle Foundation
— Special Olympics Nelson
Education & Training Initiatives
— NMIT aquaculture scholarships
Supporting local schools
Supporting Regional & Economic
Development Initiatives
— Marlborough Chamber of Commerce
— Nelson Tasman Chamber of Commerce
— Moananui - Blue Economy cluster
— Blue Economy CRC
We have donated our product to
a range of events:
— Te Mana Kuratahi Kapa haka festival
— Charity Christmas dinner
— Zomi Harvest Festival
— Charity golf events
Here is a snapshot of what we have supported this year:
Clockwise from top right: Signing of Moananui Partnership; Omega Plus fundraiser for local
charity Marlborough Four Paws; Showcasing our Regal products at the Havelock Mussel
and Seafood Festival; Team members fundraising for Daffodil Day; Delivering Christmas
hampers to local charity Kai Rescue; Pink ribbon breakfast fundraiser
33
New Zealand King Salmon — Annual Report FY24
Our People, Culture & CommunityContents
Looking to the Future – Developing a
Relationship Ecosystem for Success
Building confidence amongst our communities is key
to increasing our Company’s resilience. This requires
investing in our relationships; nurturing the range of
existing relationships established over 35+ years of
operation in the Top of the South, as well as identifying
and developing new partnerships. This is particularly
important for growing our future in the open ocean — a
future that requires lateral and collaborative thinking, as
we enter a new frontier of aquaculture in New Zealand.
Communications – Telling our Story
We at NZKS are proud of the Company we have
developed over 35+ years. Ensuring that we share who
we are, what we stand for, and where we are going,
will be critical for the year ahead. We will be initiating
strong communications throughout our social media,
proactive media releases, and our website throughout
the year.
Sustainability Action
Reducing Plastic and Supporting
Local Suppliers
Partnering with a local milk supplier,
our Nelson site received 7,400 glass milk
bottles in FY24, eliminating what would
have been 3,700 plastic milk containers.
This local programme showcases circular
thinking in action – with their glass milk
bottles repeatedly refilled and reused. At
the end of life, glass can then be recycled
endlessly without loss in quality or purity.
Sustainability Action
Supporting Local Schools and
Education Initiatives
We provided King salmon eggs to Queen
Charlotte College and Marlborough Boys’
College for hatching and growing as part
of their aquaculture studies.
Team members at Picton Maritime Festival
34
New Zealand King Salmon — Annual Report FY24
Our People, Culture & CommunityContents
20+
charities/local
organisations
supported
Participated in
4 flagship food
events, raising
more than
Joined Moananui
– New Zealand’s
first Blue Economy
cluster
271.5kg
waste collected
over 49 beach
cleanups during the
2023 calendar year
for local
charities
$
12k
Michael McEntee recently transitioned from an
aquaculture team leader into a specialist health,
safety and wellbeing advisor role
35
New Zealand King Salmon Annual Report FY24
Our People, Culture & CommunityContents
STRONG
BRANDS
36
New Zealand King Salmon Annual Report FY24
Contents
Ōra King Documentary screening in Los Angeles
Strong Brands
We continue to focus on reaffirming our
premium positioning through creative
storytelling across foodservice, retail
and petfood categories. FY25 will see
us amplify our brands through strategic
partnerships and ambassadors.
Our consumer brands continue to perform well locally
and internationally amidst supply constraints.
These constraints were evidenced through a smaller than
average fish size during September – December which
impacted size-sensitive export markets. This was a result
of the final stages of transition to the new farming model
and will not be repeated in future years (aside from
seasonal harvest fish).
We continue to focus on reaffirming
our premium positioning through
creative storytelling across foodservice,
retail and petfood categories
37
New Zealand King Salmon — Annual Report FY24
Strong BrandsContents
Growing our global digital
footprint, with unprompted
engagement from high profile
chefs and celebrities using our
premium King salmon, continues
to be a focus.
Traceability enhancements continue with
updated gill tags incorporating QR codes,
making it even easier for customers to trace
their individual Ōra King salmon back to the
source. The Ōra King documentary, produced
in 2021 is still relevant today, and throughout
FY24 we held screenings in Melbourne,
New York and Los Angeles. Ōra King TYEE
continues to take the world by storm; the
1000th TYEE was harvested in FY24 and
served at a celebratory event in New York
with our North American Ambassadors. FY25
will see us deepen engagement with our
Global Ambassador network as advocates
of our premium foodservice brand.
Ambassador Chef Liwei Liao aka ‘Dry Aged
Fish Guy’, preparing TYEE 1000 in NYC
Cured Ōra King salmon dish prepared by
Ambassador Chef Gideon Landman of
Tantalus Estate, Waiheke
A number of our New Zealand and
Australian Ambassador Chefs at Peter
Gordon’s Homeland
Watch the Ōra King Documentary
38
New Zealand King Salmon — Annual Report FY24
Strong BrandsContents
Regal is our premium retail brand, and
with over thirty years of leadership in
the salmon category in New Zealand,
it is ranked as the number one smoked
salmon brand across Awareness,
Consideration, Usage and Preference.
*
Increasing our digital footprint and engagement
has been, and will continue to be, a focus for the
Regal brand, utilising our brand ambassadors to
extend reach across social and online communities.
Rebuilding relevance and dialling up our premium
position will be executed across our global markets
in FY25 through creative point of sale and brand
building with our retailers.
*Ref: Panel Survey Data via ‘Tracksuit’ 31 Jan 2024
39
New Zealand King Salmon — Annual Report FY24
Strong BrandsContents
With a shift in strategy, the Omega Plus
wet and dry pet food ranges transitioned
out of traditional grocery stores and into
pet specialty retail stores in FY24.
As a result, we have invested in educating pet speciality
store team members, to ensure they can effectively
and confidently communicate the Omega Plus product
features, health benefits, and usage to their customers.
Work is now underway to expand this education direct to
the customer by amplifying all touch points. In addition
to strengthening relationships with existing export
markets, we will explore opportunities in the Australian pet
speciality stores. Innovation and new product development
continues with exciting new formats in the pipeline to
support the requirements of pet specialty store customers
and export markets.
‘Look As Good As You Feel’ Campaign
Our Look As Good As You Feel Campaign, launched in
FY24, is a series of pop-up events around the country
aimed at encouraging customers to try out and switch to
Omega Plus. We share our unique brand story, give out
samples and even have a photo-booth for dogs to make it
an interactive event. This campaign, along with our online
competitions, has achieved high levels of engagement.
Sustainability Action
Omega Plus Range
We have already experienced the benefits
of circular-thinking and elevating the
value of our remaining raw materials
through the successful development and
commercialisation of the premium Omega
Plus range. These remaining raw materials
are now the number one ingredient in our
much-loved, nutritious pet food brand.
‘Look as Good as you feel’
event in Wellington
Our ‘Look as Good as you feel’
campaign achieved high levels of
engagement online.
40
New Zealand King Salmon — Annual Report FY24
Strong BrandsContents
Regal brand health
– number 1 smoked
salmon in NZ
across Awareness,
Consideration, Usage
and Preference
29,553 votes and 261
competition entries to
Omega’s ‘Look As Good
As You Feel’ campaign
Ōra King TYEE
harvested
to those affected by Cyclone
Gabrielle and other animal shelters
throughout the year
new Regal
products
launched
1000
th
4
worth of
Omega Plus
pet food donated
$
10k
41
New Zealand King Salmon Annual Report FY24
Strong BrandsContents
41
%
NORTH
AMERICA
NEW
ZEALAND
36
%
11
%
AUSTRALIA
5
%
ASIA
EXC. CHINA / JAPAN
3
%
1
%
JAPAN
3
%
EUROPE
CHINA
Our
Global Sales
Footprint
42
New Zealand King Salmon — Annual Report FY24
Strong BrandsContents
Share of Total Revenue by Market
New Zealand – 36% (FY23 41%)
Regal retail revenue across the domestic market
increased compared to the previous year, this was
due to the introduction of smaller pack sizes, which
at a lower price point, stimulated shopper purchases
as shoppers adapted to the increased cost-of-
living. Demand for fresh salmon remains steady and
continues to exceed supply in the domestic foodservice
category, with fresh fillets in particular demand.
Market Dynamics
We have carefully managed our markets
and categories throughout FY24 to ensure
price and product optimisation.
Australia – 11% (FY23 10%)
Retail sales for Regal saw the benefit of increased
distribution that mitigated the impact of price increases
across this market. Ōra King demand remains strong
and continues to grow. Strong demand for fresh fillets
and whole fish continues in the foodservice category
with some customers and end users switching to fillets
as staffing levels have been slow to recover.
North America – 41% (FY23 37%)
Demand for Regal King salmon branded product
continues to grow, and increased distribution in
late FY24 helped the year to finish strongly for the
retail category. Ōra King demand remains strong in
the foodservice category, although growth here is
constrained by limited supply.
43
New Zealand King Salmon — Annual Report FY24
Strong BrandsContents
Europe – 3% (FY23 4%)
Constrained supply limited our growth in Europe with
greater demand than our ability to supply in the first
half of the year. Demand in the second half softened as
many European markets struggled with increased costs
of living.
Japan – 3% (FY23 3%)
Despite significant price increases in this market,
demand has remained steady. Supply to the Japanese
foodservice category reduced year-on-year due to
supply constraints.
China – 1% (FY23 NA)
FY24 saw us re-enter into the foodservice category
in China where we are building a good partnership
programme.
Asia (exc. China & Japan) – 5% (FY23 5%)
Similar to other markets, demand remains greater than
our ability to supply. However, support for our brands
remains strong despite higher pricing.
Domestic
retail
18
%
International
foodservice/retail
64
%
Domestic
foodservice
18
%
Whole
salmon
50
%
24
%
Fillets and
Portions
4
%
Wood
Roasted
14
%
Cold
Smoked
Other
8
%
Regal
20
%
New Zealand
King Salmon
45
%
30
%
Ōra King
Southern
Ocean
3
%
Omega
Plus
2
%
Sales by
Brand
($ FY24)
Sales by
Product
($ FY24)
Sales by
Channel
($ FY24)
44
New Zealand King Salmon — Annual Report FY24
Strong BrandsContents
LEADERSHIP &
CORPORATE GOVERNANCE
45
New Zealand King Salmon Annual Report FY24
Contents
Leadership &
Corporate Governance
Board of Directors
With overall responsibility for setting the Company’s
strategic direction and enhancing shareholder value, our
Board is committed to ensuring the Company meets best
practice governance principles and maintains the highest
ethical standards.
Catriona Macleod
Independent Non-Executive
Director, GIBio, MSc,
PhD, GAICD, BSc
Paul Munro
Independent Non-Executive
Director, BCom, FCA, CFInstD
(Joined 1 March 2024)
Chiong Yong Tiong
Non-Executive Director
MCom, BCom
Victoria Taylor
Independent Non-Executive
Director, BCom
Paul Steere
Independent Non-Executive
Director
Mark Dewdney
Independent Non-Executive
Chair, BMS
Carol Chen
Non-Executive Director
BBA
Jack Porus
Non-Executive Director
BCom, LLB
46
New Zealand King Salmon — Annual Report FY24
Leadership & Corporate GovernanceContents
Read our Board and Executive
Team Biographies
Executive
The Executive is focused on ensuring the Company is
managed at the highest strategic level and they work to
realise the Company’s long-term corporate objectives.
In addition to the Executive, the Senior Leadership
team includes: Nikki Rackley (GM People & Culture),
David Wright (GM ICT), Denver McGregor (GM
Food Safety & Quality), Cindy Steele (GM Omega
Innovations), and Monique Hatfull (Head of
Relationships & Communication).
Carl Carrington
Chief Executive Officer
Graeme Tregidga
Chief Commercial Officer
Richard Smith
General Manager, Processing
Ben Rodgers
Chief Financial Officer
Grant Lovell
General Manager, Aquaculture
47
New Zealand King Salmon — Annual Report FY24
Leadership & Corporate GovernanceContents
Corporate Governance
Corporate Governance Statement
The Board of New Zealand King Salmon Investments Limited (the Company) together
with its subsidiaries (the Group) is committed to ensuring that the Company meets
best practice governance principles and maintains the highest ethical standards. This
Corporate Governance Statement provides an overview of the Company’s governance
framework. It is structured to follow the revised NZX Corporate Governance Code
(NZX Code) effective 1 April 2023 and disclose practices relating to the NZX Code’s
recommendations.
The Board’s view is that during the reporting period, the Group has complied with the
corporate governance principles and recommendations set out in the revised NZX
Code apart from specific areas noted in this report. The Board believes our governance
structures and in particular, our remuneration approach meets the Company’s strategic
objectives. In forming our conclusions, we have sought external feedback from advisors to
challenge our thinking and validate our findings, which we have appreciated.
The Company’s key corporate governance documents referred to in this statement,
including charters and policies, can be found on the Company’s website:
www.kingsalmon.co.nz/governance.
The Company’s Corporate Governance Code was reviewed, updated and approved
by the Board in September 2023. The extent to which the Company has followed the
recommendations in the NZX Code for the financial period to 31 January 2024 is detailed
in this Corporate Governance Statement, which is dated and was approved by the Board,
on 26 March 2024.
1. Principle 1 – Ethical Standards
Directors should set high standards of ethical behaviour, model this behaviour and
hold management accountable for these standards being followed throughout the
organisation.
Recommendation 1.1
The Board should document minimum standards of ethical behaviour to which the
issuer’s Directors and employees are expected to adhere (a Code of Ethics).
The Code of Ethics and where to find it should be communicated to the issuer’s
employees. Training should be provided regularly. The standards may be contained in
a single policy document or more than one policy.
The Code of Ethics should outline internal reporting procedures for any breach of
ethics, and describe the issuer’s expectations about behaviour, namely that every
Director and employee:
a. Acts honestly and with personal integrity in all actions;
b. Declares conflicts of interest and proactively advises of any potential conflicts;
c. Undertakes proper receipt and use of corporate information, assets and property;
d. In the case of Directors, gives proper attention to the matters before them;
e. Acts honestly and in the best interests of the issuer, as required by law, and takes
account of interests of shareholders and other stakeholders;
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f. Adheres to any procedures around giving and receiving gifts (for example, where
gifts are given that are of value in order to influence employees and Directors,
such gifts should not be accepted);
g. Adheres to any procedures about whistle-blowing (for example, where actions
of a whistle-blower have complied with the issuer’s procedures, an issuer should
protect and support them, whether or not action is taken); and
h. Manages breaches of the code.
Code of Ethics
The Board sets a framework of ethical standards for the Group via its Code of Ethics,
which is contained in the Company’s Corporate Governance Code. These standards
are expected of all Directors and employees of the Group.
Every new Director, employee and contractor is provided with a copy of the Code of
Ethics and must confirm that they have read and understand the Code of Ethics. The
Code of Ethics is available on the Company’s website.
Training on the Code of Ethics to existing employees is required at least once every
three years or in the year after the Code of Ethics is materially amended. In FY24
there were no material amendments, and the Company has confirmed a training
schedule for existing employees in FY25.
The Code of Ethics is subject to regular review by the Board.
The Company maintains an interests register, on which Directors and executives
disclose any interests such as other Directorships, shareholdings, or ownership, which
may potentially lead to conflicts or perceived conflicts of interest.
The Company has a formal whistle-blowing policy that is reviewed and circulated to
all staff every two years. The policy is due for review in FY25. Any reported breaches
of the code of ethics are investigated by the People & Culture team. For any
substantiated claims, this is reported through to the Board.
Any reported breaches of the code of ethics are investigated by the People & Culture
team. For any substantiated claims this is reported through to the Board.
Recommendation 1.2
An issuer should have a financial product dealing policy which applies to employees
and Directors.
Share Trading by Company Directors and Employees
The Board of the Company has implemented a formal procedure to handle trading
in the Company’s quoted financial products. All Directors, officers, employees,
contractors and advisers of the Group must comply with the procedures set out in
the Financial Products Trading Policy and Guidelines as detailed in the Company’s
Corporate Governance Code, available on the Company’s website.
All trading by Directors and senior managers (as defined by the Financial Markets
Conduct Act 2013) is required to be reported to NZX and recorded in the Company’s
securities trading register. A blackout period is imposed for all Directors and
employees between the end of the half year and full year and the release to NZX of
the result for that period. The policy provides that shares may not be traded at any
time by any individual holding material information. The full procedures are outlined
in the Financial Products Trading Policy and Guidelines, which is contained in the
Company’s Corporate Governance Code, available on the Company’s website.
2. Principle 2 – Board Composition and Performance
To ensure an effective Board, there should be a balance of independence, skills,
knowledge, experience and perspectives.
Recommendation 2.1
The Board of an issuer should operate under a written charter which sets out the roles
and responsibilities of the Board. The Board charter should clearly distinguish and
disclose the respective roles and responsibilities of the Board and management.
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Responsibilities of the Board
The Board is the ultimate decision-making body of the Company and appoints the
Chief Executive Officer (CEO) to whom it delegates the responsibility of managing
day-to-day operations.
The Board is responsible for setting the strategic direction of the Company, directing
the Company and enhancing shareholder value in accordance with good corporate
governance principles.
In addition to the duties and obligations of the Board under the Companies Act 1993
(the Act) and the NZX Listing Rules, the functions of the Board include:
• Appointing the Chair and the CEO.
• Providing counsel to, and reviewing the performance of, the CEO and Chief
Financial Officer (CFO).
• Reviewing and approving the strategic, business and financial plans prepared by
management.
• Monitoring performance against the strategic, business and financial plans.
• Approving major investments and divestments.
• Ensuring ethical behaviour by the Company, Board, management and employees.
• Assessing its own effectiveness in carrying out its functions.
The Board monitors these matters by receiving reports and plans from management
and appropriate experts, and by maintaining an active programme of Company
site visits.
The Board uses committees to address certain issues that require detailed
consideration by members of the Board who have specialist knowledge and
experience. The Board retains ultimate responsibility for the functions of its
committees and determines their responsibilities.
The Board has a statutory obligation to maintain responsibility for certain matters.
It also deals directly with issues relating to the Company’s mission, appointments
to the Board, strategy, business and financial plans.
Details of the Board’s role, composition, responsibilities, operation, policies and
committees are provided in the Company’s Corporate Governance Code, available
on the company’s website.
Recommendation 2.2
Every issuer should have a procedure for the nomination and appointment of
Directors to the Board.
Director Nomination and Appointment
The Board is responsible for appointing Directors. The People and Performance
Committee manages the appointment process for new Directors and the re-
election of existing Directors in order to make a recommendation to the Board.
The nomination and appointment procedure is set out in the Committee’s charter,
which is included in the Company’s Corporate Governance Code.
When considering an appointment, the Committee will undertake a thorough
check of the candidate and their background. Where the Board determines a
person is an appropriate candidate, shareholders are notified of that and are
provided with all material information that is relevant to the decision on whether
to elect or re-elect a Director.
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The People and Performance Committee also has responsibility for reviewing the
composition of the Board to ensure that the Company has access to the most
appropriate balance of skills, qualifications, experience, perspectives and background
to effectively govern the Company. The Board intends to undertake an independent
skill review in FY25.
The average tenure of the current Directors is 6.3 years.
Recommendation 2.3
An issuer should enter into written agreements with each newly appointed Director
establishing the terms of their appointment.
Letter of Appointment
All new Directors enter into a written agreement with the Company setting out the
terms of their appointment.
Recommendation 2.4 and 2.8
Every issuer should disclose information about each Director in its annual report or on
its website, including:
a. a profile of experience, length of service, independence, and ownership interests.
b. the Director’s attendance at Board meetings; and
c. the Board’s assessment of the Director’s independence, including a description
as to why the Board has determined the Director to be independent if one of
the factors listed in table 2.4 applies to the Director, along with a description of
the interest, relationship or position that triggers the application of the relevant
factor.
A majority of the Board should be Independent Directors.
Board of Directors
The Directors are listed on page 46 of this report. A more detailed profile is available
on the Company's website, www.kingsalmon.co.nz/governance, including
information on the year of appointment, skills, experience and background of each
Director.
The roles of the Board Chair; Audit, Finance and Risk Committee Chair; and CEO are
not held by the same person.
Ownership of the Company’s shares by Directors is encouraged rather than being a
requirement. Directors’ ownership interests are disclosed on page 79.
The Board does not have a tenure policy; however, it recognises that a regular
refreshment programme leads to the introduction of new perspectives, skills,
attributes and experience.
Director period of appointment0-3 years3-9 years9 - 12 years12 years+
Number of Directors3202
Interests Register
The Board maintains an Interests Register. Any Director with an interest in a
transaction with the Company must immediately disclose to the Board the
nature, monetary value and extent of the interest. A Director who is interested in a
transaction may attend and participate at a Board meeting at which the transaction
is discussed but may not be counted in the quorum for that meeting or vote in respect
of the transaction, unless it is one of which Directors are expressly required by the
Companies Act 1993 to sign a certificate or it relates to the granting an indemnity.
Particulars of entries made in the Interests Register for the year to 31 January 2024 are
included in the Director Disclosures section on pages 77–78.
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Director Independence
On the advice of the People and Performance Committee, the Board determines
annually on a case-by-case basis who, in its view, are Independent Directors. The
factors listed in the NZX Code that may cause a Board to determine that a Director is
not independent are considered in addition to other factors for this purpose including,
that the Director:
• is currently, or was within the last three years, employed in an executive role by the
issuer, or any of its subsidiaries;
• is currently deriving, or within the last 12 months derived a substantial portion of
his, her or their annual revenue from the issuer;
• is currently, or was within the last 12 months, in a senior role in a provider of
material professional services (other than an external auditor) to the issuer or any
of its subsidiaries;
• is currently, or was within the last three years, employed by the external auditor to
the issuer, or any of its subsidiaries;
• currently has, or did have within the last three years, a material business
relationship (e.g. as a supplier or customer) with the issuer or any of its
subsidiaries;
• is a substantial product holder of the issuer, or a senior manager of, or person
otherwise associated with, a substantial product holder of the issuer;
• is currently, or was within the last three years, in a material contractual relationship
with the issuer or any of its subsidiaries, other than as a Director;
• has close family ties or personal relationships (including close social or business
connections) with anyone in the categories listed above;
• has been a Director of the entity for a period of 12 years or more.
The Board will review any determination it makes on a Director’s independence
on becoming aware of any new Information that may affect that Director’s
independence. For this purpose, Directors are required to ensure they immediately
advise the Board of any new or changed relationship that may affect their
independence or result in a conflict of interest.
As at 31 January 2024, the Board had seven Directors, four of whom were considered
independent. The Board confirms that it determined Mark Dewdney, Paul Steere,
Catriona Macleod and Victoria Taylor were Independent Directors as at 31 January
2024. In its review, the People and Performance Committee noted Paul Steere has
been a Director for over 15 years. The NZX Code lists tenure of 12 years or more as
a factor that may cause a board to determine that a Director is not independent.
When assessing independence, the Board considered the effect of Paul Steere’s
length of tenure, and has concluded that Paul Steere’s length of tenure, and
prior involvement with NZKS, has not in practice impacted his ability to bring an
independent view to decisions in relation to NZKS; act in the best interests of NZKS;
and represent the interests of NZKS’s financial product holders generally.
As disclosed at the 2023 Annual Shareholders’ Meeting, Paul Steere indicated that,
if re-elected, he did not intend to serve a full three-year term and will retire in line
with the overall succession planning for the Board. On 15 January 2024 the Company
announced Paul Steere would be resigning on 31 March 2024, and replaced by Paul
Munro who commenced as an Independent Director on 1 March 2024 in line with the
overall succession planning for the Board.
Following the resignation of Paul Steere and appointment of Paul Munro, there are
the no other immediate succession plans for the Board.
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As at 31 January 2024As at 31 January 2023
PositionFemaleMale
Gender
diverse
FemaleMale
Gender
Diverse
Board3 (43%)4(57%)-3 (43%)4(57%)-
Senior Leadership Team
1
3 (30%)7 (70%)-3 (33%)6 (67%)-
NZKS Organisation170 (37%)287 (63%)-171 (39%)264 (61%)-
1
The SLT are considered officers of NZK for the purposes of NZX Listing Rule 3.8.1(c).
Recommendation 2.5
An issuer should have a written diversity policy which includes requirements for
the Board or a relevant Committee of the Board to set measurable objectives for
achieving diversity (which, at a minimum, should address gender diversity) and to
assess annually both the objectives and the entity’s progress in achieving them.
The issuer should disclose the policy or a summary of it.
Diversity Policy
The Company recognises the value in diversity and seeks to ensure that the Board
and workforce of the Group is as diverse as the community in which we operate. A
formal diversity policy was adopted by the Board and can be found in the Company’s
Corporate Governance Code, availiable on the Company's website.
The Company does recruit, promote and compensate on the basis of merit – regardless
of gender, ethnicity, religion, age, nationality or union membership. The Company
does require that people in the workplace are treated with respect in accordance with
the Company’s Code of Conduct and Way We Work framework. The diversity policy
provides further examples of how the Group puts diversity and inclusion into practice.
The Board is reviewing the most appropriate measurable objectives and will report
against its progress in meeting any specific diversity objectives set by the Board in its
2025 Annual Report.
The Board is committed to increasing the level of diversity at Board and Executive
level wherever possible. In FY24, the objective was set to have no less than 30% of
females in leadership positions, and no less than 30% males in leadership positions.
The Company has a long-term target of equal male and female representation
at Board and Senior Leadership Team (SLT) level, however, this target has not yet
been achieved.
Responsibility for workplace diversity and the setting of measurable objectives is held
by the People and Performance Committee.
The gender composition of the Company is as follows:
In FY24, the Company started to record ethnic diversity of employees to better
understand its cultural make-up. As at 31 January 2024, the Company had 36
ethnicities.
Recommendation 2.6
Directors should undertake appropriate training to remain current on how to best
perform their duties as Directors of an issuer.
Director Training
The Board ensures that there is appropriate training available to all Directors to enable
them to remain current on how best to discharge their responsibilities and keep up to
date on changes and trends in areas relevant to their work.
In FY23 the Board engaged an external advisor to undertake a 360-degree feedback
review of the CEO and a peer and management review of the Board, against best
practice benchmarks. As a result of this, in FY24 the following collective development
areas were identified for the Board:
• Te ao Māori
• Sustainability
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• Delivery of major projects
• Operational excellence and Capital allocation
The Board is working with management to deliver training which uplifts the Boards
capability in these areas.
In addition, Directors are provided with industry information and receive copies of
appropriate company documents to enable them to perform their role. The Board
has allocated funding of $1,000 per annum for each Director to provide resources
to help develop and maintain skills and knowledge.
Directors are expected to maintain their knowledge of latest governance and
business practices in order to perform their duties.
The Board also ensures that new Directors are appropriately introduced to
management and the business.
Recommendation 2.7
The Board should have a procedure to regularly assess Director, Board and
Committee performance.
Board Performance Evaluation
The Board annually assesses its effectiveness in carrying out its functions and
responsibilities. The Chair of the Board leads the review and evaluation of the Board
as a whole, and of the Board Committees, against their charters. The Chair of the
Board also engages with individual Directors to evaluate and discuss performance
and professional development.
In FY23 the Board engaged an external advisor to undertake a 360-degree
feedback review of the CEO and a peer and management review of the Board,
against best practice benchmarks. This provided the opportunity for a formal
review of Board as a whole and individual feedback for each Director. The report
was delivered in December 2022 (FY23). The Board is targeting to reengage the
external advisor in FY25 to assess what progress has been made against these
actions.
Recommendation 2.9 and 2.10
An issuer should have an independent Chair of the Board.
The Chair and the CEO should be different people.
Chair Assessment
The Chair of the Board has been determined as independent and the role of Chair
and CEO are held by separate individuals to ensure that a conflict of interest does
not arise. The Chair of the Board is responsible for leading the Board, facilitating the
effective contributions of all Directors and promoting constructive and respectful
relations between Directors and between the Board and management. The Chair is
also responsible for setting the Board’s agenda and ensuring that adequate time is
available for discussion of all agenda items, in particular strategic issues.
3. Principle 3 – Board Committees
The Board should use committees where this will enhance its effectiveness in key
areas, while still retaining Board responsibility.
Board Committees
The Board has established four committees:
• Audit, Finance and Risk Committee
• People and Performance Committee
• Health & Safety and Food Safety Committee
• Fish Farming Committee
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Each committee focuses on specific areas of governance and together they
strengthen the Board’s oversight of the Company. Committee membership is
reviewed annually.
Each Committee has a written charter that is approved by the Board and sets
out its mandate. The charters are reviewed regularly with any proposed changes
recommended to the Board for approval. The charters can be found within the
Company’s Corporate Governance Code.
Attendance at Meetings
The table below sets out Director attendance at Board and Committee meetings
during the financial year to 31 January 2024.
DirectorBoard
Audit,
Finance
and Risk
Committee
People and
Performance
Committee
Health &
Safety and
Food Safety
Committee
Fish
Farming
Committee
Mark Dewdney
(Chair)
1
6/63/33/33/36/6
John Ryder
(Chair)
1
4/41/1
Paul Steere
(Chair Audit, Finance
and Risk Committee)
9/94/4
Jack Porus
(Chair Fish
Farming Committee)
7/93/44/414/14
Catriona Macleod
(Chair
Health & Safety and Food Safety
Committee)
9/95/513/14
Chiong Yong Tiong8/95/5
Yuen Ping Carol Chen9/9
Victoria Taylor
(Chair People and
Performance Committee)
9/94/4
1
John Ryder resigned from the NZK Board effective 14 June 2023, Mark Dewdney was appointed to the NZK Board as
Independent Chair on the same date.
Recommendation 3.1
An issuer’s Audit Committee should operate under a written charter. Membership on
the Audit Committee should be a majority of Independent Directors and comprise
solely of Non-Executive Directors of the issuer. The Chair of the Audit Committee
should be an Independent Director and not the Chair of the Board.
Audit, Finance and Risk Committee
The purposes of the Audit, Finance and Risk Committee include:
• Provide oversight for all elements of the Company’s risk.
• Provide oversight of financial reporting, internal control systems and disclosure
requirements.
• Provide oversight the Company’s capital and treasury management.
• Review the performance, appointment and services provided by the external
auditor, including assessment of auditor independence.
• Provide oversight of the climate-related risks and opportunities faced by the
Company and assist with the preparation of climate related disclosures.
The members of the Committee are majority Independent Directors and all Non-
Executive Directors, all with accounting and financial knowledge. The members are:
• Paul Steere (Chair) – Independent, Non-Executive.
• Mark Dewdney – Independent, Non-Executive.
• Jack Porus – nominated as a Director by Oregon Group Limited and thus
not Independent.
The Chair of the Audit, Finance and Risk Committee and the Board Chair are
different people.
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Relevant Qualifications and Experience
Paul Steere (Audit, Finance and Risk Committee Chair) – Paul is a graduate of the
Stanford Executive Program and is also a Chartered Fellow of the NZ Institute of
Directors with an extensive career across primary industries in both executive and
governance capacities.
Mark Dewdney – Mark holds a Bachelor of Management Studies with an extensive
career across Primary industries in both executive and governance capacities.
Jack Porus – Jack holds bachelor’s degrees in Law and Commerce and has extensive
commercial experience as both a consultant and in a governance capacity.
The Audit, Finance and Risk Committee held four meetings during the period to
31 January 2024. The agenda items for each meeting generally relate to financial
governance, external financial reporting, external audit, and risk management.
Recommendation 3.2
Employees should only attend Audit Committee meetings at the invitation of the
Audit Committee.
Meeting Attendance
The CEO, CFO, and Head of Finance and Sustainability are regularly invited to attend
Audit, Finance and Risk Committee meetings. The Committee also regularly holds
private sessions with the external auditors, which management is excluded from.
Recommendation 3.3 and 3.4
An issuer should have a Remuneration Committee which operates under a written
charter (unless this is carried out by the whole Board). At least a majority of the
Remuneration Committee should be Independent Directors. Management should
only attend Remuneration Committee meetings at the invitation of the
Remuneration Committee.
An issuer should establish a nomination committee to recommend Director
appointments to the Board (unless this is carried out by the whole Board), which
should operate under a written charter. At least a majority of the nomination
committee should be Independent Directors.
People and Performance Committee
The People and Performance Committee’s role is to assist the Board by:
• Overseeing the management of people and performance activities of
the Company.
• Overseeing the Company’s remuneration structure, policies, procedures and
practices to ensure the Company’s remuneration is fair and reasonable.
• Defining the roles and responsibilities of the Board and senior management.
• Reviewing and making recommendations on Board composition and succession.
In particular, the People and Performance Committee’s role is to ensure that the
Board is balanced in terms of skills and knowledge and to ensure that the method
of nomination and appointment of Directors is transparent.
The People and Performance Committee shall comprise of, wherever possible,
a majority of Independent Directors.
The current members of the Committee are:
• Victoria Taylor (Chair) – Independent, Non-Executive.
• Mark Dewdney – Independent, Non-Executive.
• Jack Porus – nominated as a Director by Oregon Group Limited and
thus not Independent.
No Executive Directors sit on this Committee.
The Committee held four meetings during the financial year to 31 January 2024.
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Recommendation 3.5
An issuer should consider whether it is appropriate to have any other Board
committees as standing Board committees. All committees should operate under
written charters. An issuer should identify the members of each of its committees,
and periodically report member attendance.
Health & Safety and Food Safety Committee
The Company has, since 2014, operated a management Health & Safety Steering
Group, generally meeting quarterly and with attendance by a Board Director.
The Board’s commitment to ensuring a safe and healthy workplace for team
members, contractors and visitors led to it establishing a Health & Safety and Food
Safety Committee, which operates under a written charter.
The primary functions of the Health & Safety and Food Safety Committee are:
• To assist the Board to provide leadership and policy for health & safety and food
safety.
• To assist the Board to fulfil its responsibilities and to ensure compliance with all
legislative and regulatory requirements in relation to the management of health
& safety, and food safety practices of the Company.
• To support the ongoing improvement of health & safety and food safety in the
workplace.
• To identify health & safety risk, and food safety risk across the Company’s
operations; propose or endorse mitigation measures; and ensure such further
measures to be enacted so the risk is managed to as satisfactory level as practical.
The members of the Committee are:
• Catriona Macleod (Chair) – Independent, Non-Executive
• Mark Dewdney – Independent, Non-Executive
• Chiong Yong Tiong – nominated as a Director by Oregon Group Limited and thus
not Independent.
The Committee held five meetings during the financial year to 31 January 2024.
Fish Farming Committee:
A Fish Farming Committee has been established to consider all aspects of NZKS fish
farming.
The primary functions of the Fish Farming Committee are:
• To assist the Board in considering all aspects of NZKS fish farming.
• To support the ongoing improvement in fish health and farming strategies.
• Ensure the identification of both the opportunities and risks to the Company’s fish
farming operations.
The members of the Committee are:
• Jack Porus (Chair) – nominated as a Director by Oregon Group Limited and thus
not Independent
• Mark Dewdney – Independent, Non-Executive
• Catriona Macleod – Independent, Non-Executive
The Committee held fourteen meetings during the financial year to 31 January 2024.
Recommendation 3.6
The Board should establish appropriate protocols that set out the procedure to
be followed if there is a takeover offer for the issuer including any communication
between insiders and the bidder. The Board should disclose the scope of independent
advisory reports to shareholders. These protocols should include the option of
establishing an independent takeover committee, and the likely composition and
implementation of an independent takeover committee.
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Takeover Protocols
The Board has documented and adopted a series of protocols to be followed in the
event of a takeover offer being made, including communication between insiders and
any bidder.
It is proposed that the Board would form a subcommittee to oversee the protocols
and act as the takeover committee. The Committee would have responsibility for
managing the takeover in accordance with the Board protocols and the New Zealand
Takeovers Code.
4. Principle 4 – Reporting and Disclosure
The Board should demand integrity in financial and non-financial reporting, and in
the timeliness and balance of corporate disclosures.
Recommendation 4.1
An issuer’s Board should have a written continuous disclosure policy.
Shareholder Communications and Market Disclosure
The Company’s Board is committed to the principle that high standards of reporting
and disclosure are essential for proper accountability between the Company and its
investors, employees and stakeholders.
The Company achieves these commitments, and the promotion of investor
confidence, by ensuring that trading in its shares takes place in an efficient,
competitive and informed market. The Company has in place a written Shareholder
Communications and Market Disclosure Policy designed to ensure this occurs. The
policy includes procedures intended to ensure that disclosure is made in a timely and
balanced manner and in compliance with the NZX Listing Rules, such that:
• All investors have equal and timely access to material information concerning
the Company, including its financial situation, performance, ownership and
governance.
• Company announcements are factual and presented in a clear and balanced way.
The CFO is responsible for the Company’s compliance with NZX and ASX continuous
disclosure requirements and the Board is advised of, and considers, continuous
disclosure issues at each Board meeting or whenever else required.
Significant market announcements, including the preliminary announcement of the
half year and full year results, the financial statements for those periods, and any
advice of a change in earnings forecast, are approved by the Board.
Directors consider at each Board meeting whether there is any material information
which should be disclosed to the market.
Recommendation 4.3
Financial reporting should be balanced, clear and objective.
Financial Reporting
The Board is responsible for ensuring the integrity and timeliness of its financial
reporting. As noted above under ‘Board Committees’, the Audit, Finance and Risk
Committee monitors financial reporting risks in relation to the preparation of the
financial statements.
The Audit, Finance and Risk Committee, with the assistance of management, works
to ensure that the financial statements are founded on a sound system of risk
management and internal control, and that the system is operating effectively in all
material respects in relation to financial reporting risks.
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The Audit, Finance and Risk Committee oversees the quality and integrity of external
financial reporting including the accuracy, completeness, balance and timeliness
of financial statements. It reviews half-year and annual financial statements and
makes recommendations to the Board concerning accounting policies, areas of
judgement, compliance with financial reporting standards, stock exchange and legal
requirements, and the results of the external audit.
All interim and full-year financial statements are prepared in accordance with
relevant financial standards.
Recommendation 4.4
An issuer should provide non-financial disclosure at least annually, including
considering environmental, social and governance (ESG) factors and practices. It
should explain how operational or non-financial targets are measured. Non-financial
reporting should be informative, include forward looking assessments, and align with
key strategies and metrics monitored by the Board.
Non-Financial Reporting
The Company is committed to providing non-financial disclosure that is balanced,
clear and objective. Reporting of environmental, social and governance factors is
contained in this Annual Report. The Company is continuing to develop its
non-financial reporting metrics. Specifically, a focus for FY24 has been establishing
the Company’s carbon emission assessment base year for our carbon emissions
disclosure under the Aotearoa New Zealand Climate Standards (these emissions will
be subject to an external audit in FY25). The base emissions will form another input to
contribute to the continued development of the Company’s non-financial reporting.
Non-financial reporting is provided throughout this Annual Report and is referenced
throughout the following sections:
• Overview
• Aquaculture
• Sustainability
• Our People, Culture & Community
• Strong Brands
• Leadership & Corporate Governance
• Financial Statements
Aotearoa New Zealand Climate Standards
The Company falls into the category of a Climate Reporting Entity under the Financial
Markets Conduct Act 2013. The Company’s first climate-related disclosures will be
for the year ended 31 January 2024 and will be prepared in accordance with the
Aotearoa New Zealand Climate Standard requirements. The Company has relied upon
the exemption provided by the Financial Markets Authority to not include its climate
-related disclosures in this Annual Report. The Company has instead provided the
below link to where the climate-related disclosures will be available when they are
released (which will be no later than 31 May 2024).
View NZKS Climate-Related Disclosures
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New Zealand King Salmon — Annual Report FY24
Leadership & Corporate GovernanceContents
5. Principle 5 – Remuneration
The remuneration of Directors and senior management should be transparent,
fair and reasonable.
Recommendation 5.1
An issuer should have a remuneration policy for the remuneration of Directors. An
issuer should recommend Director remuneration to shareholders for approval in a
transparent manner. Actual Director remuneration should be clearly disclosed in
the issuer’s annual report.
Recommendation 5.2
An issuer should have a remuneration policy for remuneration of executives,
which outlines the relative weightings of remuneration components and relevant
performance criteria.
Recommendation 5.3
An issuer should disclose the remuneration arrangements in place for the CEO
in its annual report. This should include disclosure of the base salary, short-
term incentives and long-term incentives and the performance criteria used to
determine performance-based payments.
Remuneration Report Introduction
This Remuneration Report outlines the Company’s overall reward strategy for the
period to 31 January 2024 and provides detailed information on the remuneration
arrangements in this period for the Directors of the Company, including the CEO,
and other nominated executives.
The Company’s Remuneration Policy, which may be amended from time to time,
is reviewed regularly. The Company has also established a number of additional
policies to support a strong governance framework and uphold ethical behaviour
and responsible decision making.
Remuneration Policy
The People and Performance Committee is responsible for making recommendations
to the Board on remuneration policies and packages for Directors, the CEO and
nominated executives. The primary objectives of the Remuneration Policy are to
provide a competitive and flexible structure that reflects market practice but is
tailored to the specific circumstances of the Company and which reflects each
person’s duties and responsibilities, in order to attract, motivate and retain people
of the appropriate quality. This includes the Company’s responsibility to monitor
diversity and ensure pay equity.
The People and Performance Committee is currently undertaking a review of the
Remuneration Policy. As part of this review the policy will be updated to include
the renumeration of Directors. The policy is expected to be approved in the first
half of FY25.
The People and Performance Committee reviews market data on remuneration
structure and quantum. The remuneration packages of the CEO and nominated
executives are structured to include a Short-Term Incentive Scheme (STI Scheme)
that is directly linked to the overall financial and operational performance of the
Company. The CEO and nominated executives may also be invited to participate in
the Company’s Long-Term Incentive Scheme (LTI Scheme). The long-term benefits
of the LTI Scheme are currently conditional upon the Company share price meeting
certain performance criteria and staff tenure criteria.
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Remuneration Structure
In accordance with best practice corporate governance, the structure of Non-
Executive Director remuneration is separate and distinct from the remuneration of
the CEO and other Executives.
Components of Compensation – Non-Executive Directors
a. Remuneration
The Board seeks to set aggregate remuneration for Non-Executive Directors at a level
which provides the Company with the ability to attract and retain Directors of the
highest calibre, whilst incurring a cost which is acceptable to shareholders.
No remuneration is payable to Non-Executive Directors unless it is approved by
the Company’s shareholders. The NZX Listing Rules specify that shareholders can
approve a per Director remuneration amount or an aggregate Directors’ fee pool.
Shareholders approved an aggregate fee pool of $600,000 at the June 2023 Annual
Shareholders’ Meeting.
The aggregate remuneration paid to Non-Executive Directors and the manner
in which it is apportioned amongst Directors is reviewed annually, with any
proposed increase in the aggregate pool put to shareholders for approval at the
Company’s next Annual Shareholders’ Meeting. The Board reviews its fees to ensure
the Company’s Non-Executive Directors are fairly remunerated for their services,
recognising the level of skill and experience required to fulfil the role, and to enable
the Company to attract and retain talented Non-Executive Directors. The process
involves benchmarking against a group of peer companies. In addition, the Board
reviews the Committee structure and appropriate level of resourcing required to
make an on-going contribution to long term value creation.
Non-Executive Directors have no entitlement to any performance-based remuneration
or participation in any share-based incentive schemes. This approach reflects the
differences in the role of the Non-Executive Directors, which is to provide oversight
and guide strategy, and the role of management, which is to operate the business
and execute the Company’s strategy. Non-Executive Directors are encouraged to be
shareholders but are not required to hold shares in the Company.
Each Non-Executive Director receives a fee for services as a Director of the Company.
An additional fee is also paid to the Chair of each Board Subcommittee. The payment
of an additional fee recognises the additional time commitment required by the
Subcommittee Chair. Directors are also entitled to be reimbursed for costs associated
with carrying out their duties.
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Fees paid for serving on CommittesTotal
DirectorBase FeeAdditional Fee
2
Audit, Finance and Risk
Committee
People and Performance
Comittee
Health & Safety and
Food Safety Committee
Fish Farming CommitteeFees Paid/Payable
Mark Dewdney
(Chair)
1
$81,957$5,000----$86,957
John Ryder
(Chair)
1
$46,027-----$46,027
Jack Porus
(Chair, Fish Farming
Committee)
$63,750$5,000$1,675$1,675-$11,250$83,351
Paul Steere
(Chair, Audit,
Finance and Risk Committee)
$63,750$5,000$13,500---$82,250
Catriona Macleod
(Chair, Health &
Safety and Food Safety Committee)
$63,750$5,000--$11,250$1,675$81,675
Chiong Yong Tiong$63,750$5,000--$1,675-$70,425
Yuen Ping Carol Chen$63,750$5,000----$68,750
Victoria Taylor
(Chair, People
and Performance Committee)
$63,750$5,000-$11,250--$80,000
Total$510,484$35,000$15,175$12,925$12,925$12,925$599,435
Fees paid or payable to the non-executive Directors of the Company for
the period to 31 January 2024 were as follows:
1
John Ryder resigned from the NZK Board effective 14 June 2023, Mark Dewdney was appointed to the NZK Board as Independent Chair on the same date.
2
Following a review of the workload carried out by the Board in FY24 which included recruitment (new Board Chair, AFRC Chair and CEO were all filled
in FY24), review of the NZK strategy, Board Charters and a Board trip to Tasmania the Board wishes to pay Directors an additional $5,000 to reflect the
additional workload carried out in FY24.
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Remuneration of CEO and Employees
The number of employees of the Group (including former employees), not being
Directors, who received remuneration and other benefits in excess of $100,000 in the
period to 31 January 2024 is set out in the remuneration bands detailed below:
Remuneration
1
FY24FY23
$100,000 to $109,999913
$110,000 to $119,999106
$120,000 to $129,99935
$130,000 to $139,99967
$140,000 to $149,99963
$150,000 to $159,99957
$160,000 to $169,99935
$170,000 to $179,99933
$180,000 to $189,99942
$190,000 to $199,99930
$210,000 to $219,99901
$220,000 to $229,99911
$240,000 to $249,99910
$250,000 to $259,99901
$260,000 to $269,99911
$270,000 to $279,99910
$300,000 to $309,99910
$310,000 to $319,99901
$340,000 to $349,99901
$370,000 to $379,99910
$460,000 to $469,99910
$600,000 to $609,99910
$1,020,000 to $1,029,99901
1
Includes redundancy payments and other prescribed fringe benefits.
Components of Compensation – CEO and Other Nominated Senior Leaders
a. Structure
The Company aims to reward the CEO and nominated Senior Leaders with a level and
mix of remuneration commensurate with their position and responsibilities within the
Group, so as to:
• Reward them for Company performance against targets set by reference to
appropriate benchmarks and key performance indicators.
• Align their interests with those of shareholders.
• Ensure total remuneration is competitive by market standards.
Remuneration consists of both fixed and variable remuneration components. The
variable remuneration component comprises the STI Scheme and the LTI Scheme.
The proportion of fixed remuneration and variable remuneration is established for the
CEO and for each nominated Senior Leader by the Board, following recommendations
from the People and Performance Committee and the CEO (in the case of the
nominated Senior Leaders only).
The remuneration packages for the CEO and nominated Senior Leaders are all subject
to Board approval. No LTI grant was made in FY24 as the People and Performance
Committee is designing a new LTI scheme, the People and Performance Committees
intention is to reflect the grants that would otherwise have been made under a LTI for
FY24 in FY25 once a new scheme has been designed and approved by the Board.
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Fixed RemunerationPay for performance
YearBase Salary
1
Vehicle Allowance
Contractual
Obligations on
Resignation and
Exit Payments
Total Fixed
Remuneration
Short-Term
Incentive (STI)
4 & 5
Long-Term
Incentive (LTI)
Total at Risk
Total
Remuneration
CEO
Grant Rosewarne
2
FY23 $376,165 $18,300 $633,430 $1,027,895 $1,027,895
Graeme Tregidga
2
FY23 $112,196 $7,887 $120,073 $120,073
Graeme Tregidga
3 & 5
FY24 $227,519 $16,615 $244,134 $203,841 $203,841 $447,975
Carl Carrington
3
FY24 $272,356 $272,356 $272,356
Other SLT MembersFY23 $1,814,496 $15,252 $60,000 $1,889,748 $1,889,748
Other SLT MembersFY24 $1,874,152 $15,252 $1,889,404 $309,814 $309,814 $2,199,218
The mix of fixed versus variable ‘at risk’ remuneration payable in respect of FY24
and FY23 are provided below:
1
Base Salary includes Superannuation contributions, insurance premiums and any leave cashed in.
2
Grant Rosewarne resigned as CEO effective 1 November 2022, following Grant’s resignation, Graeme Tregidga was appointed as acting CEO.
3
Carl Carrington was appointed as CEO effective 7 August 2023, following Carl’s appointment, Graeme Tregidga has moved into a Chief
Commercial Officer role, Graeme’s salary from 7 August 2023 is included in Other SLT Members
4
Short Term Incentive payments correspond to the achievement of performance targets in the previous reporting period unless otherwise
stated (i.e. The Short-Term Incentive in FY24 relates to the achievement of performance related targets in FY23).
5
The Board elected to pay a portion of Graeme Tregidga’s FY24 STI early, in addition to a discretionary bonus payment to reflect his
contribution to the Company as acting CEO. These payments are detailed in the STI table that follows.
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1. Fixed Annual Remuneration
Remuneration levels are reviewed annually to ensure that they are appropriate for the
responsibility, experience and performance of the CEO and each nominated Senior
Leader and are competitive with the market.
In addition, the overall mix of variable compensation and their terms are also
considered when setting and/or reviewing fixed remuneration.
The CEO and nominated Senior Leaders receive their fixed annual remuneration in
cash and a limited range of prescribed benefits such as superannuation, motor vehicle
and health insurance. The total employment cost of any remuneration package,
including fringe benefit tax, is considered in determining an employee’s fixed annual
remuneration.
2. Variable Remuneration – STI Scheme
The objective of the STI Scheme is to link the achievement of the annual financial and
operational targets with the remuneration received by the Senior Leaders charged
with meeting those targets. The total potential remuneration under the STI Scheme
is set at a level to provide sufficient incentive to the Senior Leaders to achieve the
targets such that the cost to the Company is flexible and in line with the trading
outcome for the year.
Financial
• pro-forma operating EBITDA results (weighting 80%)
Non-Financial
• Employee engagement score (weighting 20%)
• Completion of Health & Safety conversations (no weighting – must be achieved)
In addition to the above, new CEO Carl Carrington had additional targets relating to
the completion of the new Company strategy.
Although the Company is in the process of resetting its strategy and
performance objectives following the recent recruitment of a new Chair and
CEO, the People and Performance Committee considers that the above targets
align with the objectives of delivering sustainable earnings. The Company
intends to develop more ESG targets that will be included within performance
objectives. This is an area that will be reassessed annually as the Company
matures in this reporting space.
The People and Performance Committee considers the performance against
the targets and determines the amount, if any, to be allocated to the CEO and
nominated Senior Leaders. STI Scheme payments are delivered as a taxable
cash bonus and are payable on completion of the annual audited financial
statements.
It should be noted that the level of remuneration detailed may include STI
bonus payments that were achieved in the previous financial year.
STI Year
CEO
Grant
Rosewarne
CEO
Graeme
Tregidga
CEO
Carl
Carrington
Other SLT
Members
Total
FY22 STI Paid in FY23
FY23 STI Paid in FY24 $82,500$309,814$392,314
FY23 STI Accrued (not paid) $140,490 $140,490
FY24 STI Paid in FY24$71,341 $71,341
FY24 Discretionary Bonus
Paid in FY241
$50,000 $50,000
FY24 STI Accrued in FY24
(Payable FY25)
1
$50,000 $82,500 $407,165$539,665
1
The Board elected to pay a portion of Graeme Tregidga’s FY24 STI early, in addition to a discretionary bonus payment
to reflect his contribution to the Company as acting CEO.
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STI Scheme payment values are set as a percentage of base cash remuneration,
being 30% for the CEO and 25% for the other nominated executives for the financial
period to 31 January 2024. For the financial period to 31 January 2024, there were 10
nominated Senior Leaders in the STI Scheme (31 January 2023: 10 nominated Senior
Leaders). For the financial period to 31 January 2024, a $50k STI payment for FY24 was
paid to Graeme Tregidga early for his services as acting CEO during FY24.
In addition to the CEO and nominated Senior Leaders, an additional $200k has been
accrued for a number of individuals within the wider senior management team.
In addition to the STI Scheme, the Board reserves the ability to pay ad hoc bonus
payments to any employee, again either directly related to the trading outcome or a
specific performance target.
Variable Remuneration – LTI Scheme
The LTI Scheme has been designed to link reward with key performance indicators
that drive sustainable growth in shareholder value over the long term. The objectives
of the LTI Scheme are to:
• Align the CEO and nominated participants’ interests with those of shareholders.
• Help provide a long-term focus.
• Retain high calibre senior employees by providing an attractive equity-based
incentive that builds an ownership of the Company mindset, encouraging
executives to think and act like owners.
The hurdle rate used for the LTI scheme is an absolute share price growth hurdle,
which is more challenging over time than a relative TSR approach. This approach only
rewards executives if the shareholders also do well.
Under the LTI Scheme, the CEO and nominated participants are offered an interest
free loan which is to be applied to acquire shares in the Company. Shares acquired
under the LTI Scheme are held by a custodian and will only vest to the employee
if they are still employed by the Company after three years from the date of
issue. All dividends paid during this period are offset against the loan balance.
Once the shares vest, the employee remains obligated to repay the outstanding
balance of the loan. If an employee leaves employment before the expiry of
the three-year period, the custodian may exercise a call option to have the
employee’s beneficial interest in the shares transferred to it in consideration
of the custodian taking the balance of the loan. Any shares so transferred can
be used for future grants or alternatively, the custodian is authorised to sell
that employee’s shares with the proceeds applied to repay the balance of the
loan, with any deficit covered by the Company and any surplus retained by the
Company.
An offer may be made under the LTI Scheme to the CEO and nominated
participants each financial year and is based on individual performance as
assessed by the annual appraisal process. If a nominated participant does not
sustain a consistent level of high performance, they will not be nominated for
participation in the LTI Scheme. The People and Performance Committee reviews
all nominated participants, with participation in the LTI Scheme subject to final
Board approval. The Board has retained the discretion to vary the applicable
criteria for each offer under the LTI Scheme. Once the Board has fixed the criteria
for a specific offer under the LTI Scheme, those performance hurdles cannot be
varied in respect of that offer.
Each employee’s loan amount (which determines how many shares will be
acquired) is set as a percentage of their base salary and selected employees will
be offered a loan for this amount if the criteria set by the Board are met.
No LTI grant was made in FY23 and FY24 as the People and Performance
Committee is designing a new scheme. The People and Performance
Committee’s intention is to reflect the grants that would otherwise have been
made under the LTI for FY23 and FY24 once a new scheme has been designed
and approved by the Board.
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During the year, a number of employees left the Company, resulting in the forfeiture,
buy back or exercise of 10,703 shares (31 January 2023: 1,501k shares), the consequent
exercise of call options and redemption of gross loans of $15,750 (31 January 2023:
$2,231k). Details of a Put Option held by former CEO Grant Rosewarne at 31 January
2024 in relation to loans outstanding on vested shares acquired by a family trust
associated with Mr Rosewarne, are detailed under loans outstanding on vested shares.
As at 31 January 2024, there were 33 nominated participants remaining in the LTI
Scheme, (31 January 2023: 42 nominated executives).
Shares Held by the CEO and Nominated Executives
The total numbers of shares allocated under the Senior Executive Share Ownership
Scheme and LTI Schemes as at 31 January 2024 are as follows:
Allocation
Date
Vesting
Date
Average
Share
Price
Number
of
Shares
Granted
During
the Year
Vested
During
the Year
Lapsed or
Transferred
During the
Year
Balance
at the
End of
the Year
LTI 2020
Scheme (A)
28/01/20221/09/20231.53129,535 --(129,535)-
LTI 2021
Scheme (A)
28/01/20221/09/20241.76126,551 ---126,551
LTI 2021
Scheme (E)
28/01/20221/09/20241.3669,770-- 69,770
LTI 2021
Scheme
-Sen. Exec.
28/01/202214/10/20241.48219,595 -- 219,595
Totals545,451--(129,535)415,916
Allocation
Date
Vesting
Date
Average
Share
Price
Number
of
Shares
Granted
During
the Year
Vested
During
the Year
Lapsed or
Transferred
During the
Year
Balance
at the
End of
the Year
LTI 2020
Scheme
8/10/20201/09/20231.5321,078--(21,078)
LTI 2021
Scheme (A)
28/01/20221/09/20241.7618,324---18,324
Totals39,402--(21,078)18,324
1 Carl Carrington was appointed as CEO effective 7 August 2023, following Carl's appointment, Graeme Tregidga has moved into
a Chief Commercial Officer role. No LTI was issued to Carl Carrington in FY24.
It should be noted under the relevant accounting standards that the loans granted to
participants in both the Executive Share Ownership Scheme and LTI Schemes, are not
recorded on the Group’s balance sheet.
Acting CEO – Graeme Tregidga
1
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Senior Executive Share Ownership Scheme
The CEO and certain other senior executives were participants in an Executive
Share Ownership Scheme prior to the IPO, in which participants have been provided
with an interest free loan of up to 200% of the amount which the senior executive
invests in the Company. As at 31 January 2024, 2,327,191 shares are held by current
or former senior executives via the Ownership Scheme, partly funded by interest free
loans of $893,750. Details of a Put Option held by former CEO Grant Rosewarne in
relation to loans outstanding on vested shares acquired by a family trust associated
with Mr Rosewarne at 31 January 2024 are detailed under loans outstanding on
vested shares.
These shares, which have been subject to sale restrictions since the IPO, were
released from escrow on announcement of the 2018 financial results.
Under accounting standard IFRS 2 Share Based Payments, as the LTI shares are
classified as options, the total cost of each annual allocation is spread across the
three years of the vesting period from the date of issue.
The actual allocation cost is adjusted after the issue date to reflect any shares
which do not vest due to performance on tenure hurdles which are not met. The
total LTI expense/(credit) recognised in the financial statements for the year ended
31 January 2024 was ($5k) (31 January 2023: ($429k)).
Grant Rosewarne resigned as CEO effective 1 November 2022, and Graeme Tregidga
was appointed as acting CEO. On 6 July 2023, Carl Carrington was announced as
CEO, commencing 7 August 2023 (no LTI was issued to Carl in FY24). In connection
with Grant Rosewarne’s resignation, the Company granted Mr Rosewarne a Put
Option in connection with certain long-term incentive plans for the purpose of
repaying a loan owed by Mr Rosewarne to the Company in relation to the acquisition
of certain shares held by a family trust associated with Mr Rosewarne. Pursuant to
the Put Option, Mr Rosewarne may require the Company to acquire up to 2,340,883
shares (the Option Shares) held by Mr Rosewarne and Bianca Rosewarne as holders of
the Rosewarne NZ Family Trust issued in connection with certain long-term incentive
plans of NZKS for the purpose of repaying a loan owed by Mr Rosewarne to the
Company in relation to the acquisition of the Option Shares. The Put Option may be
exercised by Mr Rosewarne such that the Option Shares are acquired by the Company
on or before 28 February 2024.
On the 21 February 2024, Mr Rosewarne gave the Company notice to exercise the
aforementioned Put Option. Pursuant to that Put Option, NZK has acquired 3,272,437
ordinary shares on the 28 February 2024 (being 2,340,883 option shares plus an
additional 1,000,588 shares to settle the shortfall on the loan) the proceeds of which
have been applied to the repayment of Mr Rosewarne’s loan balance. The shares
acquired were subsequently cancelled on the day of acquisition.
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Loans Outstanding on Vested Shares
The table below shows the loans associated for shares which have vested under both
the executive share ownership scheme prior to the IPO and LTI schemes:
SchemeIssue DateVesting DateHurdle PriceShares GrantedShares ForfeitedShares Vested
Shares Settled/
Sold Back to
NZKS
Shares
Remaining with
Loan Balance
Loans in Respect
of these Shares
Less Dividend
Received After
Tax Paid
Net Loans
Senior Executive
Share Ownership
Scheme2011 – 201629/08/20180.483,062,164 -3,062,164 (734,973)2,327,191 $893,750 - $893,750
LTI IPO31/08/20161/09/20191.12993,671 (220,500)773,171 (254,206)518,965 $581,241 ($82,097) $499,144
LTI 2017a29/09/20171/09/20201.22270,274 (15,073)255,201 (94,762)160,439 $195,735 ($17,916) $177,819
LTI 2017b29/09/20171/09/20201.7747,241 (17,611)29,630 (17,569)12,061 $21,348 ($1,347) $20,001
Total 4,373,350 (253,184)4,120,166 (1,066,372)3,018,656 $1,692,074 ($101,360) $1,590,714
CEOYear
Shares VestedLoan
Grant Rosewarne
1
FY232,340,883 $1,102,189
Graeme Tregidga
1
FY23185,594$118,562
Graeme Tregidga
2
FY24185,594$118,562
1
Grant Rosewarne resigned as CEO effective 1 November 2022, following Grant’s resignation, Graeme Tregidga was
appointed as acting CEO. As at 31 January 2024, the loan remained outstanding. NZKS determined that it will offer to
acquire the Option Shares (Buyback Offer). The terms of the Buyback Offer are as follows:
• Pursuant to the Put Option, the Company offers to buyback the Option Shares at the volume weighted average price
of NZKS’ ordinary shares (the Shares) traded on the NZX Main Board for the five trading days prior to the exercise of
the Put Option.
• The Put Option may only be exercised once, and the proceeds will be applied to repayment of a loan owing by Mr
Rosewarne to the Company in relation to the Option Shares.
On the 21 February 2024, Mr Rosewarne gave the Company notice to exercise the aforementioned put option. Pursuant to
that put option, NZK has acquired 3,272,437 ordinary shares on the 28 February 2024 (being 2,340,883 option shares plus an
additional 1,000,588 shares to settle the shortfall on the loan) the proceeds of which have been applied to the repayment of
Mr Rosewarne’ loan balance. The shares acquired were subsequently cancelled on the day of acquisition.
2
Carl Carrington was appointed as CEO effective 7 August 2023. Following Carl’s appointment, Graeme Tregidga moved into
a Chief Commercial Officer role. No LTI has been issued to Carl Carrington in FY24.
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Employee Share Ownership Scheme
At the time of the Company’s IPO, it established an Employee Share Ownership
Scheme to facilitate an increase in the level of participation by employees as
shareholders, which improves the alignment of interests between employees and
shareholders. Under the scheme, each eligible employee was offered an interest free
loan up to $5,000 to fund 50% of the subscription price for the shares which the
employee wished to acquire in the Company. Employees are obliged to repay their
loan when the shares are sold or when they leave the Company.
A total of 187,076 shares were issued at the time, supported by loans of $104,762
from the Company. During the period to 31 January 2024, 2 employees holding shares
have left the Company (31 January 2023: 4), and no shares have been sold by current
employees (31 January 2023: 0). As at 31 January 2024, the following shares were held
by employees under the Employee Share Ownership Plan.
Allocation
Date
Allocation
Date
Number of Shares
Scheme
Balance at start
of year
Sold during the
year
Balance at the
end of the year
Employee Share
Ownership Plan
19 October
2016
19 October
2016
55,32010,714 44,606
6. Principle 6 - Risk Management
Directors should have a sound understanding of the material risks faced by the issuer
and how to manage them. The Board should regularly verify that the issuer has
appropriate processes that identify and manage potential and material risks.
Recommendation 6.1
An issuer should have a risk management framework for its business and the
issuer’s Board should receive and review regular reports. An issuer should report the
material risks facing the business and how these are being managed.
Risk Management Framework
The Board is responsible for ensuring that key business risks are identified, and that
appropriate controls and procedures are in place to effectively manage those risks.
Risk registers are regularly reviewed by senior management and any changes to
material risks are reported to the Board. At times the Company also works with
third-party advisors to review these risk registers and provide feedback.
The Audit, Finance and Risk Committee has overall responsibility for ensuring
that the Company’s risk management framework is appropriate and that it
appropriately identifies, considers and manages risks. In addition, risks are also
considered at the other subcommittees and reported through to the Board by
subcommittee Chairs.
Risk management is an integral part of the Company’s business. A risk
management framework incorporating a risk register is used to identify those
situations and circumstances in which the Company may be materially at risk and
for which risk mitigation activities are appropriate. This approach is intended to
provide a comprehensive, company-wide awareness of risk in senior management,
supported by a consistent method of identifying, assessing, controlling, monitoring
and reporting existing and potential risks to the Company’s business.
Key risks that NZKS has identified are provided below, risks are dynamic and as such
this section does not (and does not purport to) set out all of the risks facing NZKS
as some risks may be unknown and other risks, currently believed to be immaterial,
could turn out to be material.
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AreaDescription of RiskKey Strategies to Mitigate
Fish mortalityFish mortality has a significant impact on the profitability and financial stability of NZKS as
only the fish that survive to the point of harvest are able to be sold.
Every year, a number of fish will die prior to harvest due to a range of factors.
The cause of fish mortality is multi-factorial with the dominant correlation currently
being with prolonged elevated water temperature which increase stress and reduces the
salmon's resistance to bacterial and other pathogens. Other factors include opportunistic
microorganism/diseases, feed-related issues, failed smoltifaction, predators, and other
stressors, individually or in combination. Whilst the interconnectivity of these factors are
difficult to predict with any certainty, rising water temperatures are increasingly becoming a
major concern given the impact of climate change.
While the impact of climate change is near impossible to control, NZKS currently manages
the risk of fish mortality by:
Fallowing warmer, low flow sites (either seasonally over summer of completely) or stocking
these sites at low density, actively monitoring fish health and maintaining appropriate net
cleaning regimes.
Immunisation of young salmon against specific pathogens at the freshwater stage has also
been in place for several years to build resilience prior to seawater entry.
NZKS is also undertaking R&D activities including researching thermotolerance within its King
Salmon families to provide potential future mitigants against temperature risk.
Access to waterspace
and water
Changes to local and central government policy surrounding aquaculture present a material
concern for NZKS, with the possibility that policy changes, however well intentioned, may
present an additional compliance burden, resulting in an increase to NZKS’s costs and/
or reduce the biomass capacity at current consented and future farming locations. These
impacts individually or in combination may make farming salmon uneconomical.
In addition, the Company’s processing operations require access to water to process our
harvested fish.
NZKS is currently undertaking activity to reconsent existing sites (Ruakaka, Otanerau both
currently operational, Waihinau Bay, Forsyth Bay and Crail Bay currently fallowed) whose
consents will expire at the end of CY24.
NZKS is also continuing to assess suitable locations for future sites – having recently obtained
a consent for the Blue Endeavour site in February 2024.
NZKS is assessing the viability of a new greenfield processing site in addition to investigating
ways to improve efficiency of our existing processing site.
Market accessNZKS products are sold to a number of export markets and there is a risk that regulatory
change in specific markets will impair NZKS’s access to these markets, significantly impacting
sales levels and profitability.
This may be a closure of the market, or introduction of new rules that impact NZKS products,
and may affect the time spent at entry ports for clearance.
NZKS’s international customers expect continuity of supply, which requires consistent access
to key markets in a timely manner and without extensive compliance obligations. Additionally,
as NZKS products are highly perishable, they also require swift clearance at the port, and
extensive or changing compliance requirements may hinder clearance timeframes.
NZKS’s food safety team works closely with relevant government departments to ensure
compliance prior to its products leaving New Zealand, which is expected to limit the likelihood
of access to relevant markets being restricted.
The food safety team also works with industry bodies and government departments to
forward plan for any longer-term compliance issues that may arise in advance of activity
in-market.
In the past, NZKS has moved products between markets in response to changes in pricing
demand. Similarly, given the global demand for King salmon, NZKS expects that if one
market is closed or subject to more onerous restrictions, NZKS will be able to find alternative
channels to sell its products, however, the margins may be lower in the short term.
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AreaDescription of RiskKey Strategies to Mitigate
Feed costs and qualityFeed is one of NZKS’s biggest costs. Sourcing good quality feed is crucial for NZKS as it is one
of the key contributors to fish performance and fish health.
An increase in the cost of feed or a decrease in the quality of feed will have a significant
impact on NZKS’s operations and profitability.
Further, given the rarity of King salmon globally, research and development to design feed
specifically for King salmon is not extensively undertaken by global feed companies and
this can create risks when changing dietary components, including the risk of increased fish
mortality.
NZKS has an ability to pass price increases onto customers, however, it is unclear whether
NZKS will be able to fully pass on the increased cost of raw materials to customers.
Risks around feed price and quality are partially mitigated by NZKS endeavouring to source
feed from multiple suppliers.
To further understand supplier performance NZKS benchmarks feed to measure fish
performance on various diets
Food safetyNZKS produces ready-to-eat products which are consumed in a raw state, such as cold smoked
salmon, sushi and sashimi.
There is a risk NZKS products could contain harmful bacteria or other organisms, such as
listeria, which is unique in that it is a foodborne pathogen which can grow below 4°C.
Food safety incidents could result in reputational damage, regulatory consequences (including
fines, penalties, loss of licences or temporary shutdowns of facilities), and product recalls. The
potential magnitude of any food safety incident could be severe.
In addition, new laws could also be passed which impose further food safety requirements
on NZKS, which may require significant capital expenditure to comply with, reducing NZKS’s
operational performance.
NZKS takes rigorous steps to minimise the risk of contamination and regularly tests its fish for
any food safety issues.
Social licenseNZKS has a number of external stakeholders, including Iwi, as its business operates in
public water space. It is crucial that NZKS maintains positive relationships with its external
stakeholders to support positive outcomes for future consent applications to continue to
operate its farms. Failure to renew some or all of these consents will have a material impact on
NZKS’s operations, resulting in a decline in harvest and therefore cash flow.
NZKS engages in a range of stakeholder engagement initiatives.
These include, but are not limited to, environmental management and active stakeholder
management (i.e. with Aquaculture New Zealand, the local council, Iwi). A communications
strategy across all stakeholder groups.
The Best Aquaculture Practices (BAP) certification is the main third-party accreditation
selected to demonstrate independent assessment of the business’s operational practices
based on third party standards. NZKS ensures its compliance with BAP by engaging in regular
external audits across operations, people & culture and key suppliers to achieve four stars, the
highest rating.
Inflationary pressuresInflation could result in increasing costs for raw materials and labour costs, amongst other
things which may impact profit margins.
NZKS has an ability to pass price increases onto customers, however, it is unclear whether NZKS
will be able to fully pass on the increased cost of raw materials and labour costs to customers.
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The Board has delegated responsibility to the Audit, Finance and Risk Committee
to establish and regularly review the Company’s risk management framework.
Business risks are a standing agenda item of the Audit, Finance and Risk Committee.
Subcommittee specific risks are also considered by the Board sub committees with
reports provided by senior management. As part of this framework the Audit, Finance
and Risk Committee is tasked with identifying situations and circumstances in which
the Company may be materially at risk and initiating appropriate action through the
Board or CEO. Risk is overseen by the CEO and supports a comprehensive approach to
the management of those risks identified as material to the Company’s operations.
The CEO and CFO have provided the Board, through the Audit, Finance and Risk
Committee, with assurances that in their opinion financial records have been properly
maintained, that the financial statements comply with those accounting standards
under which the Company must report and that the statements give a true and fair
view of the Company’s financial position and performance. These representations are
given on the basis that a sound system of internal controls and risk management is
operating effectively in all material respects in relation to financial reporting.
In managing the Company’s business risks, the Board approves and monitors policy
and procedures in areas such as treasury management, financial performance,
taxation and delegated authorities.
Insurance
The Company has insurance policies in place covering most areas where risk to its
assets and business can be insured at a reasonable cost.
Recommendation 6.2
An issuer should disclose how it manages its health and safety risks and should report
on its health and safety risks, performance and management.
Health and Safety
The Board and management are committed to promoting a safe and healthy working
environment for everyone working in, or interacting with, the Company. The Company
strives for continuous improvement that takes us beyond compliance in health, safety
and wellness. This includes the reviewing of our health and safety policy statement as
well as the systems and processes that support our safety objectives.
The Company’s Health & Safety and Food Safety Committee Charter creates a shared
responsibility for all our team members and contractors to, so far as reasonably
practicable take all steps in providing a working environment that promotes health
and wellbeing. Effective controls based on industry knowledge and best practice
guidelines inform and support our risk management across all areas of the business.
7. Principle 7 – Auditors
The Board should ensure the quality and independence of the external audit process
Recommendation 7.1
The Board should establish a framework for the issuer’s relationship with its external
auditors. This should include procedures:
a. for sustaining communication with the issuer’s external auditors;
b. to ensure that the ability of the external auditors to carry out their statutory audit
role is not impaired, or could reasonably be perceived to be impaired;
c. to address what, if any, services (whether by type or level) other than their
statutory audit roles may be provided by the auditors to the issuer; and
d. to provide for the monitoring and approval by the issuer’s Audit Committee of
any service provided by the external auditors to the issuer other than in their
statutory audit role.
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Recommendation 7.2
The external auditor should attend the issuer’s Annual Shareholders’ Meeting to
answer questions from shareholders in relation to the audit.
External Auditor
The Company’s Audit, Finance and Risk Committee is responsible for oversight of
the Company’s external audit arrangements to safeguard the integrity of financial
reporting. The Company maintains an External Auditor Independence Policy to ensure
that audit independence is maintained, both in fact and appearance.
The policy covers the following areas:
• Appointment of the external auditor.
• Provision of other assurance services by the external auditor.
• Pre-approval process for the provision of other assurance services.
• External auditor lead and engagement partner rotation.
• Hiring of staff from the external auditor.
• Relationships between the external auditor and the Company.
• Reporting on fees and non-audit work.
The role of the external auditor is to audit the financial statements of the Company
in accordance with applicable auditing standards in New Zealand and to report on its
findings to the Board and shareholders of the Company.
The External Auditor Independence Policy is available in the Corporate Governance
Code which is available on the Company’s website.
Ernst & Young is the Company’s current external auditor. Brendan Summerfield is the
current audit engagement partner, in his third year following a partner rotation at the
completion of the 2021 audit. Fees paid to Ernst & Young are included in Note 30 of
the notes to the financial statements.
Both the Company’s Audit, Finance and Risk Committee Charter, and the External
Auditor Independence Policy require the external auditor to be independent,
recognising the importance of facilitating frank dialogue between the Audit,
Finance and Risk Committee, the auditor and management. The External Auditor
Independence Policy requires that the audit partner be rotated after a maximum of
five years.
The Audit, Finance and Risk Committee Charter requires the Committee to facilitate
the continuing independence of the external auditor by assessing the external
auditor’s independence, qualifications, overseeing and monitoring their performance.
This involves monitoring all aspects of the external audit, including the appointment
of the auditor, the nature and scope of its audit and reviewing the auditor’s service
delivery plan.
The external auditor is invited to attend the Annual Shareholders’ Meeting and is
requested to be available to answer questions about the audit process and the
independence of the auditor.
Recommendation 7.3
Internal audit functions should be disclosed.
Internal Audit
The Company does not have an internal audit function. However, the Company does
have a quality and compliance team dedicated to food hygiene (in relation to the
processing of harvested fish through to finished goods that are dispatched to the
end customer) and a Health and Safety Team (dedicated to providing a safe working
environment for the Company's operations). The objective of the food quality and
compliance team is to enhance and protect the organisational value of the Company
by providing risk-based and objective assurance. The management of Health and
Safety is overseen by regular internal safety audits throughout the Company’s
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operations. Governance of these areas is provided by the Health & Safety and Food
Safety Board subcommittee.
In absence of a dedicated internal audit function, the Company looks to utilise
external expertise for assessing the effectiveness of its risk management and internal
processes. For the year ended 31 January 2024, the Company undertook a review of its
risk register, risk matrix, and risk criteria with a third party experts.
Independent Professional Advice
With the approval of the Audit, Finance and Risk Committee, Directors are entitled to
seek independent professional advice on any issue related to the fulfillment of his or
her duties, at the Company’s expense. During FY24 the Directors sought independent
professional advice from an external advisor to assist with expert knowledge for the
Fish Farming Committee.
8. Principle 8 – Shareholder Rights and Relations
The Board should respect the rights of shareholders and foster constructive
relationships with shareholders that encourage them to engage with the issuer.
Recommendation 8.1
An issuer should have a website where investors and interested stakeholders can
access financial and operational information and key corporate governance
information about the issuer.
Shareholder Relations
The Company is committed to maintaining a full and open dialogue with its
shareholders and other stakeholders. Annual reports, links to the NZX/ASX,
governance policies and charters, and a variety of corporate information are posted
on the Company’s website.
The Company’s preference is for electronic communications in the interests of
sustainability and efficiency; however, a paper copy of each annual report can be
provided to shareholders on request.
Shareholder meetings will be held at a time and location to encourage participation
in person by shareholders. Annual meetings are currently held in the Nelson /
Marlborough region, reflecting the head office and production locations for the
Company.
The Company’s website includes a range of information relevant to shareholders and
others concerning the operation of the Company, including information about the
sites we operate, certifications, our brands, and the corporate governance policies of
the Company.
Recommendation 8.2
An issuer should allow investors the ability to easily communicate with the issuer,
including by designing its shareholder meeting arrangements to encourage
shareholder participation, and by providing shareholders the option to receive
communications from the issuer electronically.
Electronic Communications
Shareholders have the option of receiving their communications electronically. This is
the Company’s preferred method of communication.
Contact details for the Company’s head office are available on the website.
Recommendation 8.3
Quoted equity security holders should have the right to vote on major decisions which
may change the nature of the issuer in which they are invested.
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Major Decisions
Directors’ commitment to timely and balanced disclosure is set out in its
Shareholder Communications and Market Disclosure Policy and includes
advising shareholders on any major decisions. Where voting on a matter
is required, the Board encourages investors to attend the meeting
or, where they are unable to do so, to cast a postal or online vote, or
appoint a proxy to exercise their vote on their behalf. Shareholders may
raise matters for discussion at the Annual Shareholders’ Meeting either in
person, or by emailing the Company with a question to be asked.
Recommendation 8.4
If seeking additional equity capital, issuers of quoted equity securities
should offer further equity securities to existing equity security holders
of the same class on a pro rata basis, and on no less favourable terms,
before further equity securities are offered to other investors.
Equity Raise
The Board is responsible for considering the interests of all existing equity
holders when assessing their capital raising options.
Recommendation 8.5
The Board should ensure that the notices of annual or special meetings
of quoted equity security holders is posted on the issuer’s website as soon
as possible, and at least 20 working days prior to the meeting.
Notice of Meeting
The Company’s Notice of Meeting will be available at least 20 working
days prior to the meeting on the NZX/ASX with a link to stock
exchange announcements provided in the Investors section of the
Company’s website.
Directors
Mark
Dewdney
John
Ryder
1
Jack
Porus
Chiong
Yong Tiong
Paul
Steere
James V.
Kilmer
Justin
Reynolds
Catriona
Macleod
Carol
Chen
Victoria
Taylor
Graeme
Tregidga
New Zealand King
Salmon Investments
Limited
The New Zealand King
Salmon Co. Limited
New Zealand King
Salmon Exports
Limited
New Zealand
King Salmon USA
Incorporated
The New Zealand King
Salmon Pty Limited
NZKS Custodian
Limited
King Salmon Limited
MacCure Seafoods
Limited
Omega Innovations
Limited
Ōra King Limited
Regal Salmon Limited
Southern Ocean
Salmon Limited
Southern Ocean
Seafoods Limited
1 John Ryder resigned as Chair of New Zealand King Salmon Investments Limited and his other NZKS Directorships on 14 June 2023.
Director Disclosures
The following persons were Directors of New Zealand King Salmon Investments Limited
and its subsidiaries during the period to 31 January 2024:
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Interests Register
The following entries were made in the
interests register of the Company during
the year ended 31 January 2024:
Share Dealings by Directors
Dealings by Directors and key Senior
Managers during the period ended 31
January 2024, as entered in the Interest
Register of the Company are as follows:
Name of Director/
Senior Manager
No. of SharesNature of InterestAcquisition/Disposal
Consideration
(per share)
Date
Graeme Tregidga21,078Beneficial Owner
Forfeiture of shares under LTI
scheme
$1.5328 Sep 2023
Grant Lovell
1
123,748Beneficial OwnerInitial DisclosureN/A9 Nov 2023
Richard Smith
1
17,045Beneficial OwnerInitial DisclosureN/A9 Nov 2023
Jack Porus 200,000 Beneficial OwnerAcquisition$0.22 22 Sep 2023
200,000 Beneficial OwnerAcquisition$0.22 25 Sep 2023
3,680 Beneficial OwnerAcquisition$0.21 20 Nov 2023
4,378 Beneficial OwnerAcquisition$0.20 21 Nov 2023
44,352 Beneficial OwnerAcquisition$0.21 24 Nov 2023
47,590 Beneficial OwnerAcquisition$0.21 27 Nov 2023
30,926 Beneficial OwnerAcquisition$0.21 28 Nov 2023
28,845 Beneficial OwnerAcquisition$0.21 29 Nov 2023
100,000 Beneficial OwnerAcquisition$0.22 04 Dec 2023
28,845 Beneficial OwnerAcquisition$0.22 04 Dec 2023
Victoria Taylor 7,453Beneficial OwnerAcquisition$0.27 09 Jan 2024
11,900Beneficial OwnerAcquisition$0.25 12 Jan 2024
Catriona Macleod 3,190Beneficial OwnerAcquisition$0.28 22 Jan 2024
80,000Beneficial OwnerAcquisition$0.29 23 Jan 2024
1
The roles of GM Processing and GM Aquaculture were determined by the Board to fall within the definition of Senior Manager for the purposes of the Financial Markets Conduct
Act 2013, as a result of the responsibilities performed in these roles. Accordingly, Grant Lovell and Richard Smith were considered to be Senior Managers effective 9 November 2023.
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Disclosure of
interest in the
Interests Register
for the Company as
at 31 January 2024
were as follows:
Director Name of InterestNature
Mark DewdneyTatua Co-operative Dairy Co Ltd
1
Director
Marire General Partner Ltd
1
Independent Chair
MDLP General Partner Ltd
1
Director
Matangi Dairies Limited Partnership
1
Partner
Jack Porus
Glaister Ennor Holdings Ltd and
associated entities
Consultant to Glaister
Ennor
GEK Property Management Ltd and
associated entities
Director & Shareholder
Ernslaw One LtdDirector
The Neil Group LtdDirector
Vulcan Mortgage Management LtdDirector & Shareholder
Harbour View Investments LtdDirector
Whitford Forest Holdings CompanyDirector
Mortgage Holdings LtdDirector & Shareholder
The Rotary Club of Auckland Trustee
Company Ltd
Director
Pinnacle Life LtdDirector
Tauranga Storage LtdDirector & Shareholder
Norfolk Mortgage Management Ltd Director & Shareholder
Catriona Macleod
Australian Sustainable Seaweed
Alliance
Director
Derwent Estuary ProgramDirector
Paul Steere
Aquaculture Advisory Panel, South
Pacific Community
Chair
Nelson City Council City for all Ages
Committee
Chair
Nelson Marina Management Ltd
1
Chair
Allan Scott Wines & Estates Ltd
1
Acting Chair
Director Name of InterestNature
Victoria TaylorThree60 ConsultChair
Primary ConnectionDirector & Shareholder
Foot Science InternationalDirector
Moochi
1
CEO
Chiong TiongAotea Dairy LimitedDirector
Forestland Investment LimitedDirector
Aotea Housing LimitedDirector
Maraetai Land Development LimitedDirector
The Lumberbank New Zealand LimitedDirector
Waimarino Forests LimitedDirector
CEP Auckland LimitedDirector
Nugent Fitness LimitedDirector
Neil Corporation LimitedDirector
Winstone Pulp International LimitedDirector
Oregon Group LimitedDirector
Ernslaw One LimitedDirector
The Neil Group LimitedDirector
Neil Construction LimitedDirector
Timbergrow LimitedDirector
Innova Products LimitedDirector
Yuen Ping
Carol Chen
Deputy General Manager of Corporate
Strategy and Development at China
Resources Enterprise (CRE)
Employee
1Represent additions into the Interests Register during the year ended 31 January 2024.
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Relevant Interests
The table below records the ordinary shares in which Directors had a relevant interest
as at 31 January 2024.
Name of Director
1
Number of Ordinary Shares -
Beneficial
Number of Ordinary Shares -
Non-Beneficial
Jack Porus5,462,128-
Paul Steere2,445,325-
Victora Taylor19,353-
Catriona Macleod 83,190-
1
Neither Mark Dewdney, Chiong Yong Tiong, nor Carol Chen held any relevant interests (beneficial or non-beneficial)
as at 31 January 2024.
Use of Company Information by Directors
No notices were received from Directors pursuant to section 145 of the Companies Act
1993 to use Company information, received in their capacity as Directors, which would
otherwise not have been available to them.
Directors Liability
As permitted by the Company’s Constitution and in accordance with Section 162 of
the Companies Act 1993, the Company has indemnified all Directors and arranged
Directors’ and Officers’ Liability Insurance which ensures that, to the extent permitted
by law, Directors will incur no monetary loss as a result of actions undertaken as
Directors. Certain actions are specifically excluded, for example, the incurring of
penalties and fines, which may be imposed in respect of breaches of the law.
Size of HoldingNumber of ShareholdersNumber of Shares held%
1 - 49920545,6220.01%
500 - 99912585,3060.02%
1,000 - 1,999242320,5430.06%
2,000 - 4,9995311,693,6540.31%
5,000 - 9,9994182,927,0600.54%
10,000 - 49,99993221,815,8244.03%
50,000 - 99,99925517,370,2623.21%
100,000 - 499,99920241,190,9427.61%
500,000 - 999,9991811,952,2882.21%
1,000,000 Over38444,053,20982.01%
Total2,966541,454,710100.0%
Shareholder Information
As at 31 January 2024, there were 541,454,710 ordinary shares on issue in the
Company, each conferring on the registered holder the right to vote on any resolution
at a meeting of shareholders, held as follows:
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20 Largest Shareholders
Set out below are details of the 20 largest shareholders of the Company
as at 12 March 2024:
Shareholder Shares% of Shares
Oregon Group Limited214,146,07839.79
China Resources Enterprise Limited53,125,9349.87
HSBC Nominees A/C NZ Superannuation Fund Nominees Limited - NZCSD47,812,7188.88
Accident Compensation Corporation - NZCSD 17,966,1603.34
Masfen Securities Limited15,121,4682.81
New Zealand Depository Nominee Limited 11,647,6902.16
Takutai Limited9,907,8271.84
Jack Lee Porus & Robert Narev 5,462,1281.01
Custodial Services Limited5,357,6241.00
John William Dudley Ryder5,322,9780.99
FNZ Custodians Limited5,231,0510.97
JBWere (NZ) Nominees Limited4,195,9910.78
Grantley Bruce Rosewarne & Bianca Jade Rosewarne3,593,4360.67
Hsu Cheng Yang3,202,5410.60
Trew Pty Limited3,144,7150.58
NZKS Custodian Limited 2,855,2460.53
Peter Plowman2,333,8080.43
Iconic Investments Limited2,282,1860.42
Grant Ambury Alexander & Eileen Gayel Alexander2,247,0000.42
Citibank Nominees (New Zealand) Limited - NZCSD 2,213,6550.41
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Annual Shareholders’ Meeting
The Company’s 2024 Annual Shareholders’ Meeting will be an in-person meeting held
on 19 June 2024. Shareholders will be given an opportunity at the meeting to ask
questions and comment on relevant matters. The Notice of Meeting will be sent to
shareholders at least 20 working days in advance of the meeting.
NZX Waivers
On 21 November 2023, the Company was granted a waiver from NZX Listing Rule
5.2.1 which ordinarily requires the shareholders to have an opportunity to consider,
and vote on, Material Transactions where there is, or may be a perception of, the
potential for undue influence by a Related Party on an Issuer’s decision to enter
into a transaction or agree to its terms. The wavier was in respect of an exclusive
distribution agreement with China Resources Food Supply Chain Co. Ltd (CRFSC) to
be the exclusive distributor to import and distribute a range of King Salmon products
in Mainland China (Exclusive Distribution Agreement).
Under the terms of the Exclusive Distribution Agreement, CRFSC is required to place
orders totalling a minimum of 4,000kgs of salmon products per calendar month
throughout the term, with pricing being on commercial rates. If CRFSC fails to place
an order for the minimum order volume for any calendar month throughout the
term, NZK can either terminate the Exclusive Distribution Agreement or appoint one
or more other distributors within Mainland China.
The Board considers that CRFSC is a Related Party of NZK for the purposes of NZ
Listing Rule 5.2.1 as China Resources Enterprise Limited (CRE) (the 40% indirect
shareholder of CRFSC) owns 9.81% of the shares in NZK and Yuen Carol Chen,
Deputy General Manager of Corporate Strategy and Development at CRE, is a
Director of NZK.
Whilst the price and volume of the products supplied to CRFSC under the Exclusive
Distribution Agreement will vary, there is potential for NZK to supply products to
CRFSC with a value in excess of 10% of the Average Market Capitalisation of NZK
during the life of the trading relationship between CRFSC and NZK. As a result, NZK
sought, and has been granted a waiver from Listing Rule 5.2.1 to the extent that
this Rule would otherwise require NZK to seek shareholder approval in relation to the
supply of products to CRFSC under the Exclusive Distribution Agreement.
The Board considers the Exclusive Distribution Agreement is in the best interests
of NZK and its non-interested shareholders. China represents an important export
market for our premium species and has the ability to provide additional demand for
both our current volumes, and future growth aspirations. The terms of the Exclusive
Distribution Agreement have been negotiated, and entered into, on an arms length
commercial basis.
Exercise of NZX Disciplinary Powers
NZX Limited did not exercise any of its powers under Listing Rule 5.4.2 in relation to
the Company during the period to 31 January 2024.
Donations
Donations made by the Group during the period of 31 January 2024 totalled $3,136
(31 January 2023: $4,775) No donations were made to political parties.
Shareholder SharesClass of Share
Oregon Group Ltd214,146,078 Ordinary
China Resources Enterprise Ltd53,125,934 Ordinary
New Zealand Superannuation Fund Nominees Ltd47,812,718 Ordinary
Substantial Product Holders
Set out below are details of the substantial product holders of the Company as
advised by notice to the Company, as at 31 January 2024. The number of shares
shown below is as advised in the most recent substantial product holder notices given
to the Company and may not be their holding as at 31 January 2024.
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Committee Members
Audit, Finance and Risk
Committee
Paul Steere (Chair)
Jack Porus
Mark Dewdney
(Appointed 14 June 2023)
John Ryder
(Resigned 14 June 2023)
People and Performance
Committee
Victoria Taylor (Chair)
Jack Porus
Mark Dewdney
(Appointed 14 June 2023
Health & Safety and Food
Safety Committee
Catriona Macleod (Chair)
Chiong Yong Tiong
Mark Dewdney
(Appointed 14 June 2023)
Fish Farming Committee
Jack Porus (Chair)
Catriona Macleod
Mark Dewdney
Board of Directors
John William Dudley Ryder
Independent Non-Executive Chair
(Resigned 14 June 2023)
Mark Dewdney
Independent Non-Executive Chair
(Appointed 14 June 2023)
Jack Lee Porus
Non-Executive Director
Paul James Steere
Independent Non-Executive
Director
Chiong Yong Tiong
Non-Executive Director
Catriona Macleod
Independent Non-Executive
Director
Carol Chen
Non-Executive Director
Victoria Taylor
Independent Non-Executive
Director
Paul Munro
Independent Non-Executive
Director (Appointed 1 March 2024)
Corporate Directory
Bankers
The Bank of New Zealand
Deloitte Centre, Level 6,
80 Queen Street, Auckland,
New Zealand
Kiwibank
Level 9, 20 Customhouse Quay,
Wellington, New Zealand
Auditor
Ernst & Young (EY)
Level 4, 93 Cambridge Terrace,
Christchurch, New Zealand
Lawyers
Chapman Tripp
Level 34, 15 Customs Street West,
Auckland, New Zealand
Gascoigne Wicks
79 High Street, Blenheim,
New Zealand
Duncan Cotterill
197 Bridge Street, Nelson,
New Zealand
Tavendale and Partners
94 Nile Street, Nelson,
New Zealand
New Zealand King Salmon
Investments Limited
Ticker: NZK
Listed on the NZX Main Board and
as a Foreign Exempt Listing on the
ASX NZ Company number: 2161790
Registered Office
17 Bullen Street, Tahunanui,
Nelson 7011, New Zealand
Postal Address
PO Box 1180 Nelson 7040,
New Zealand
Telephone
+64 3 548 5714
Website
www.kingsalmon.co.nz
Investor Relations
investor@kingsalmon.co.nz
Share Registry
Computershare Investor
Services Limited
Level 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
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New Zealand King Salmon — Annual Report FY24
Leadership & Corporate GovernanceContents
FINANCIAL
STATEMENTS
83
New Zealand King Salmon — Annual Report FY24
Contents
CONTENTS
Consolidated Statement of Comprehensive Income 85
Consolidated Statement of Financial Position 86
Consolidated Statement of Changes in Equity 87
Consolidated Statement of Cash Flows 88
Notes to the Consolidated Financial Statements 89
1. Corporate Information 89
2. Basis of Preparation 89
3. Summary of Material Accounting Policy Information 91
4. New Standards Adopted and Standards
Issued Not Yet Adopted 98
5. Impairment 99
6. Other Income 99
7. Expenses 99
8. Finance Income and Costs 99
9. Income Tax 100
10. Components of Other Comprehensive Income 101
11. Earnings Per Share 101
12. Cash and Cash Equivalents 102
13. Trade and Other Receivables 102
14. Inventories 102
15. Biological Assets 103
16. Property, Plant and Equipment 105
17. Intangibles 106
18. Right-of-use Assets 107
19. Lease Liabilities 107
20. Interest Bearing Loans and Borrowings 108
21. Trade and Other Payables 108
22. Employee Benefits 108
23. Commitments and Contingencies 108
24. Risk Management 109
25. Fair Value of Financial Instruments 113
26. Capital Management 113
27. Capital and Reserves 114
28. Events After Balance Date 115
29. Related Party Disclosures 115
30. Auditor’s Remuneration 116
31. Reconciliation of Net Operation
Cash Flow to Profits /(Loss) 116
32. Revenue From Contracts with Customers 116
33. Segment Information 118
Independent Auditor’s Report 119
Glossary 124
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New Zealand King Salmon — Annual Report FY24
Contents
Consolidated Statement of Comprehensive Income
For the year ended 31 January 2024
20242023
Note$000$000
Revenue from contracts with customers32187,106167,131
Cost of goods sold14(171,203)(164,657)
Fair value gain on biological transformation1570,28749,628
Freight costs to market(20,812)(21,479)
Gross profit65,37830,623
Other income68,0658,577
Sales, marketing and advertising expenses(11,375)(12,245)
Distribution overheads(3,478)(3,463)
Corporate expenses(10,732)(10,854)
Other expenses7(868)(940)
Profit/(loss) before interest, tax, depreciation, amortisation
and impairment
46,99011,698
Depreciation and amortisation expense16,17,18(7,585)(7,915)
Impairment5-(507)
Finance income81,051337
Finance expenses8(396)(1,499)
Profit/(loss) before tax40,0602,114
The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.
20242023
Note$000$000
Income tax credit / (expense)9(11,608)(223)
Net profit/(loss) after tax28,4521,891
Other comprehensive income
Other comprehensive income that may be reclassified to profit
or loss in subsequent periods:
Exchange differences on translation of foreign operations10(18)334
Movement on cash flow hedges10(1,365)3,878
Release of early closed out foreign exchange contracts10(6,728)(7,775)
Deferred tax on early closed out foreign exchange contracts101,8842,177
Income tax effect of movement on cash flow hedges10375(1,074)
Net other comprehensive income / (loss)(5,852)(2,460)
Total comprehensive income / (loss)22,600(569)
Earnings per share
Basic earnings per share11$0.05$0.00
Diluted earnings per share11$0.05$0.00
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New Zealand King Salmon — Annual Report FY24
Financial StatementsContents
Consolidated Statement of Financial Position
For the year ended 31 January 2024
20242023
AssetsNote$000$000
Current assets
Cash and cash equivalents1220,90819,221
Trade and other receivables1318,42716,573
Other financial assets256,000-
Taxation receivable-164
Inventories1437,05929,729
Biological assets 1582,46860,348
Derivative financial assets259761,906
Total current assets165,838127,941
Non-current assets
Property, plant and equipment1648,33548,176
Biological assets1511,99212,344
Derivative financial assets252,8294,106
Intangible assets173,2823,486
Right-of-use assets186,6694,316
Deferred tax asset9-919
Total non-current assets73,10773,347
Total Assets238,945201,288
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
For and on behalf of the Board, who authorised the issue of these financial statements on 26March 2024.
Director - Mark Dewdney
26 March 2024
Director - Paul Steere
26 March 2024
20242023
LiabilitiesNote$000$000
Current Liabilities
Trade and other payables2116,53613,662
Employee benefits 223,9743,465
Borrowings203,417750
Lease liabilities191,0281,191
Other financial liabilities29288278
Derivative financial liabilities253,6393,112
Taxation payable732-
Total current liabilities29,61422,458
Non-current liabilities
Employee benefits22472501
Borrowings202,0002,750
Lease liabilities195,8723,328
Deferred tax liabilities97, 74 1-
Derivative financial liabilities252,9514,345
Total non-current liabilities19,03610,924
Total liabilities48,65033,382
Net assets190,295167,906
Equity
Share capital27180,143180,143
Reserves1,3607,423
Retained earnings /(deficit)8,792(19,660)
Total equity190,295167,906
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New Zealand King Salmon — Annual Report FY24
Financial StatementsContents
Consolidated Statement of Changes in Equity
For the year ended 31 January 2024
Share
Capital
Foreign
Currency
Translation
Reserve
Hedge
Reserve
Share
Based
Payment
Reserve
Retained
Earnings/
(Deficit)
Total
Equity
Note$000$000$000$000$000$000
Balance as at 1 February 2023180,143(614)7, 2 0 9828(19,660)167,906
Profit for the year----28,452 28,452
Other comprehensive income/(loss)10-(18)(5,834)--(5,852)
Total comprehensive income/(loss) for the year-(18)(5,834)-28,452 22,600
Share based payment expense/(credit)---(211)-(211)
Balance as at 31 January 2024180,143 (632) 1,375 617 8,792 190,295
Balance as at 1 February 2022122,606(948)10,0031,120(21,551)111,230
Profit for the period----1,891 1,891
Other comprehensive income/(loss)10-334(2,794)--(2,460)
Total comprehensive income/(loss) for the year-334(2,794)-1,891 (569)
Share issue 57,537---- 57,537
Share based payment expense/(credit)---(292)-(292)
Balance as at 31 January 2023180,143(614)7,209828(19,660)167,906
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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Financial StatementsContents
Consolidated Statement of Cash Flows
For the year ended 31 January 2024
20242023
Note$000$000
Operating activities
Receipts from customers187,578 170,641
Payments to suppliers(133,294)(118,404)
Payments to employees(42,001) (40,972)
Interest received1,051 337
Interest paid(308) (1,047)
Insurance and settlement income1032
Government grants received99205
Income tax paid(15)(287)
Net cash flows from / (used in) operating activities3113,213 10,475
Investing activities
Placement of short term deposits(6,000)-
Proceeds from sale of property, plant and equipment38 1,243
Purchase of property, plant and equipment(6,049) (4,557)
Purchase of intangible assets(257) (664)
Net cash flow (used in) / from investing activities(12,268) (3,978)
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
20242023
Note$000$000
Financing activities
Repayment of borrowings(1,893) (97,659)
Proceeds from borrowings3,811 51,500
Gross proceeds from share issue-60,123
Equity raise costs-(2,587)
Payment of lease liabilities(1,264) (1,573)
Net cash flows (used in) / from financing activities654 9,804
Net increase/(decrease) in cash and cash equivalents1,599 16,301
Net foreign exchange difference887
Cash and cash equivalents at beginning of the year1219,221 2,913
Cash and cash equivalents at year end1220,908 19,221
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New Zealand King Salmon — Annual Report FY24
Financial StatementsContents
Notes to the Consolidated Financial Statements
For the year ended 31 January 2024
1. Corporate Information
The consolidated financial statements of New Zealand King Salmon Investments
Limited (the Company) and its subsidiaries (together the Group) for the year
ended 31 January 2024 were authorised by the Directors on 26 March 2024.
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 Group is principally engaged in the farming, processing and sale of premium
salmon products.
2. Basis of Preparation
a. Statement of compliance
The consolidated financial statements comply with New Zealand Equivalents
to International Financial Reporting Standards (NZ IFRS Tier 1) and also with
International Financial Reporting Standards (IFRS). The financial statements are
prepared under New Zealand Generally Accepted Accounting Practices (NZ GAAP)
and Financial Markets Conduct Act 2013.
b. Basis of measurement
The financial statements have been prepared on a historical cost basis except for
biological assets and certain financial instruments which have been measured
at fair value. The carrying values of recognised assets and liabilities that are
designated as hedged items in hedging instruments, otherwise carried at
amortised cost, are adjusted to recognise changes in the fair values attributable to
the risks that are being hedged in effective hedge relationships. The consolidated
financial statements are presented in New Zealand dollars and all values are rounded
to the nearest thousand ($000), except when otherwise indicated.
c. Significant accounting judgments, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires
management to make judgments, estimates and assumptions that affect the
reported outcomes of revenues, expenses, assets, liabilities and the accompanying
disclosures. The Group based its assumptions and estimates on parameters available
when the consolidated financial statements were prepared. Uncertainties about
these assumptions and estimates could result in an outcome that requires a material
adjustment to the carrying amount of assets or liabilities in future periods.
Specific areas requiring significant estimates and judgements include:
Valuation of biological assets
The Group recognises stocks of live fish at fair value according to the principles
of NZ IAS 41 Agriculture. The fair value is measured using a valuation model that
relies on various assumptions and information available at balance date. Inputs
include anticipated market prices, costs to sell, current weights of livestock relative
to expected harvest weight, mortality rates, growth rates and production costs.
The income or loss that is ultimately recognised at time of sale may be significantly
different from that implied by the fair value adjustment at the end of a reporting
period. The fair value uplift from accumulated costs to date has no cash impact in
the reporting period. Further details of the valuation and sensitivity to change in key
inputs are given in Note 15.
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Impairment testing of intangibles, plant and equipment
The Group’s non-financial assets are assessed for indicators of impairment on at
least an annual basis and whenever events or changes in circumstances indicate
that the carrying amount of the assets may exceed their recoverable amount. In
addition the carrying value of intangible assets that are not yet available for use
are tested annually for impairment irrespective of whether there is any indication
of impairment according to the principles of NZ IAS 36 Impairment of Assets.
Where the asset’s carrying amount is determined to be greater than the
recoverable amount, the carrying amount is written down and an impairment
loss is recognised in the income statement. Impairment testing involves a
significant amount of estimation. Impairment testing involves assessing the
recoverable amount of the Group’s Cash Generating Unit (“CGU”) by calculating
the higher of the CGU’s value in use or fair value less costs of disposal. The
recoverable amount calculated under the value-in-use method includes cash flow
projections that necessarily take into account changes in the market in which
a business operates. Determining both the cash flows and the risk-adjusted
discount rate appropriate to the operating unit requires the exercise of judgment.
The estimation of cash flows is sensitive to the periods for which detailed
forecasts are available and to assumptions regarding long-term sustainable
cash flows, the assessment of impairment requires judgment to be applied
and consideration of a number of factors including but not limited to: changes
in business strategy, regulatory environment, and customer preferences or
requirements.
Inventory(Finished goods and work in progress)obsolescence
Inventories are stated at the lower of cost or net realisable value, and the Group
uses judgment and estimates to determine the net realisable value of inventory
at the end of each reporting period.
The Group estimates the net realisable value of inventory for obsolescence and
unmarketable items at the end of the reporting period and then writes down the
cost of inventories to net realisable value. The net realisable value of the inventory is
determined based on assumptions of future demand and pricing and estimates over
the remaining shelf life of the inventory.
Valuation of financial derivatives
The Group recognises financial derivatives at fair value according to the principles of
NZ IFRS 13 Fair Value Measurement. The value is calculated by a third party expert
using an industry standard model. Inputs to the model are obtained externally by the
service provider and the derivative counterparty. Further details of the valuation are
included in Note 25.
d. Foreign currency translation
Functional and presentation currency
The Group’s consolidated financial statements are presented in New Zealand dollars,
which is also the parent company’s functional currency. The Australian subsidiary’s
functional currency is Australian dollars which is translated into the presentation
currency in these financial statements. The USA subsidiary’s functional currency
is United States dollars which is translated into the presentation currency in these
financial statements.
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency and
then translated by applying the exchange rates ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are retranslated at
the rate of exchange at balance date.
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Financial StatementsContents
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate as at the date of the initial
transaction. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was determined.
3. Summary of Material Accounting Policy Information
a. Basis of consolidation
The financial statements comprise the financial statements of New Zealand King
Salmon Investments Limited and its subsidiaries (per Note 29). Subsidiaries are all
those entities over which the Company has control.
The financial statements of the subsidiaries are prepared for the same reporting
period as the Parent company using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and
transactions, income and expenses and profit and losses resulting from intra-group
transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the
Group and cease to be consolidated from the date on which control is transferred
out of the Group.
b. Financial instruments
Financial assets are classified at initial recognition as subsequently measured at
amortised cost, fair value through other comprehensive income (OCI), and fair value
through profit or loss. In order for a financial asset to be classified and measured
at amortised cost or fair value through OCI, it needs to give rise to cash flows
that are ‘solely payments of principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed at an
instrument level. Financial assets with cash flows that are not SPPI are classified and
measured at fair value through profit or loss, irrespective of the business model.
Subsequently the Group applies the following accounting policies for financial
instruments:
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and call
deposits. For the purpose of the statement of cash flows, cash and cash equivalents
consist of cash and short-term deposits net of outstanding bank overdrafts.
Trade and other receivables
Short term trade and other receivables are recognised when an amount of
consideration that is unconditional, is due from the customer (i.e only the passage
of time is required before the payment of the consideration is due). Gains and
losses are recognised in the profit or loss when the receivables are written off or
impaired.
For trade receivables and contract assets, the Group applies a simplified approach
in calculating an allowance for expected credit loss (ECL). Therefore, the Group
does not track changes in credit risk, but instead recognises a loss allowance based
on lifetime ECL’s at each reporting date. The Group has established a provision
matrix that is based on its historical credit loss experience, adjusted for forward-
looking factors specific to the debtors and the economic environment.
Loans with related parties
Loans and amounts owing from related companies are non-derivative financial
assets with fixed or determinable payments that are not quoted in an active
market. After initial recognition such assets are carried at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the
loans are derecognised or impaired.
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New Zealand King Salmon — Annual Report FY24
Financial StatementsContents
Trade and other payables
Trade and other payables are carried at amortised cost and due to their short
term nature, are not discounted. They represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid, and
arise when the Group becomes obliged to make future payments in respect of the
purchase of these goods and services. The amounts are unsecured and are usually
paid within 30-90 days of recognition.
Interest bearing borrowings
After initial recognition interest bearing borrowings are subsequently measured at
amortised cost using the effective interest method. Fees paid on establishment
of loan facilities that are yield related are included as part of the carrying
amount. Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12 months after
the balance date. Borrowing costs are generally recognised as an expense when
incurred, with the exception of borrowing costs associated with a qualifying asset
which are capitalised as part of the cost of that asset.
Financial guarantees
Financial guarantee contracts issued by the Group are those contracts that require
a payment to be made to reimburse the holder for a loss it incurs because the
specified debtor fails to make a payment when due in accordance with the terms
of a debt instrument. Financial guarantee contracts are recognised initially as a
liability at fair value, adjusted for transaction costs that are directly attributed to
the issuance of the guarantee. Subsequently the liability is measured at the higher
of the best estimate of the expenditure required to settle the present obligation at
balance date and the amount recognised less cumulative amortisation.
Derivative financial instruments and hedging
The Group uses derivative financial instruments including forward currency
contracts, options and interest rate swaps to hedge risks associated with interest
rate and foreign currency fluctuations. Such derivative financial instruments
are initially recognised at fair value on the date on which a derivative contract
is entered into and are subsequently re-measured to fair value at balance date.
Derivatives are carried as assets when their fair value is positive and as liabilities
when their fair value is negative.
The fair values of forward currency contracts are calculated by reference to current
forward exchange rates for contracts with similar maturity profiles. The fair values
of interest rate swaps are determined by reference to market values for similar
instruments.
The Group designates its derivative financial instruments as hedges of a particular
risk associated with a recognised asset or liability or a highly probable commitment
that could affect profit or loss. The effective portion of the gain or loss on the
hedging instrument is recognised directly in other comprehensive income in the
cash flow hedge reserve, while the ineffective portion is recognised immediately in
the statement of profit or loss.
Amounts accumulated in equity are transferred to profit or loss when the hedged
item affects profit or loss.
Derecoginition
A financial asset (or, where applicable, a part of a financial asset or part of a group
of similar financial assets) is primarily derecognised (i.e., removed from the Group’s
consolidated statement of financial position) when the rights to receive cash flows
from the asset have expired; Or the Group has transferred its rights to receive cash
flows from the asset or has assumed an obligation to pay the received cash flows
in full without material delay to a third party under a “pass-through” arrangement;
and either (a) the Group has transferred substantially all the risks and rewards of
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Financial StatementsContents
the asset, or (b) the Group has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset. When the
Group has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if, and to what extent, it has retained
the risks and rewards of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset, nor transferred control of the
asset, the Group continues to recognise the transferred asset to the extent of its
continuing involvement. In that case, the Group also recognises an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects
the rights and obligations that the Group has retained. Continuing involvement that
takes the form of a guarantee over the transferred asset is measured at the lower of
the original carrying amount of the asset and the maximum amount of consideration
that the Group could be required to repay.
c. Inventories
Inventories including raw materials, work in progress and finished goods are valued at
the lower of cost or net realisable value. Costs incurred in bringing each product to its
present location and condition are accounted for as follows:
Raw materials
The cost of fish is measured at fair value at harvest date. The cost of feed and
packing materials is based on the purchase price including import duties and other
taxes, transport, handling and other costs directly attributable to the acquisition of
the goods and materials. Costs are determined on a weighted average basis.
Manufactured finished goods and work in progress
Cost of direct materials, labour and a proportion of manufacturing overheads
appropriate to the stage of manufacture. Costs are assigned on the basis of
weighted average costs. The cost of items transferred from biological assets is their
fair value less costs to sell at the date of harvest.
Net realisable value
The estimated selling price in the ordinary course of business less estimated costs of
completion and the estimated costs necessary to make the sale.
d. Biological assets
Biological assets include fish livestock measured at fair value less estimated costs to
sell. The net gain or loss resulting from the fair value measurement is recognised in
profit or loss.
The fair value of fish livestock is derived from the amount expected to be received
from the sale of the asset in an active market. The costs associated with growing
the fish (e.g. feed and labour costs) are directly capitalised to biological assets. The
target live weight of the harvestable fish is defined as a fish with a live weight of 4kg
or greater. Many fish are harvested with a live weight above or below this weight.
For brood stock and fish where little biological transformation has taken place since
initial cost was incurred, cost less impairment is used as an approximation of fair
value. This value is used up to the point at which fish are transferred to sea water.
Fish stock is transferred to inventory at the time of harvest. The transfer is recorded
at its fair value which is deemed to be cost for the purposes of inventory valuation.
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e. Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated
depreciation and impairment. Depreciation is provided on a straight line basis over
the estimated useful lives of the assets as follows:
f. Group as a lessee
At the inception of a contract, the Group is required to assess whether a contract
is, or contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period in exchange for
consideration.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease
(i.e. the date the underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets.
The Group’s lease portfolio
Property leases
The Group’s real estate includes office buildings and storage facilities. The Group has
recognised some storage contracts that meet the identifiable criteria as a right of
use asset and corresponding liability portfolio under NZ IFRS 16.
Vehicle leases
The Group lease vehicles are predominantly used by sales staff and the
transportation of personnel between operating locations. These vehicles are
generally held for a term of three years.
Freehold landNot depreciated
Freehold buildingsTwenty to fifty years
Building fit outThree to twenty five years
Leasehold improvementsFive to ten years
Plant, furniture and fittingsThree to twenty years
Motor vehiclesFive to ten years
Sea vesselsTen to thirty years
During FY24 the useful life of sea vessels was extended to a maximum of thirty years
(FY23: maximum useful life for sea vessels was twenty years). No vessels capitalised
in prior years were impacted by this change.
The residual values, useful lives and methods of depreciation of property, plant and
equipment are reviewed at each financial year end and adjusted prospectively if
appropriate. An asset’s carrying value is written down immediately to its recoverable
amount if its carrying value is greater than its estimated recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when no
further future economic benefits are expected from its use or disposal. Any gain or
loss arising on de-recognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is included in profit or
loss in the year the asset is derecognised.
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Plant and equipment leases
The Group sometimes leases machinery used for the production or processing of
salmon. The current leases relate to equipment being utilised for the upwelling on sea
farms and various forklifts operated throughout the company. The Group has elected
to apply the recognition exemption for short-term leases for all other machinery
employed for less than 12 months duration and for leases where the underlying asset
is of low value.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease term. The
lease payments include fixed payments (including in-substance fixed payments) less
any lease incentives receivable, variable lease payments that depend on an index or a
rate, and amounts expected to be paid under residual value guarantees.
The Group enters into certain lease transactions that result in no liability or asset
recognised on the balance sheet due to payments on those leases being variable as
they are linked to future harvest volumes and activity level and are not based on an
index or a rate. During the period $3.0m was recognised in operating expense (2023:
$3.6m).
Short-term leases and leases of low-value assets
The Group applies short term lease recognition exemption to its short term leases
of equipment. It also applies the lease of low-value assets recognition exemption to
leases of equipment that are considered to be low value. Lease payments on short
term leases and leases of low-value assets are recognised as expense on a straight-
line basis over the lease.
g. Impairment of non financial assets
The Group assesses, at each reporting date, whether there is an indication that an
asset may be impaired. If any indication exists, or when annual impairment testing
for an asset is required, the Group estimates the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less
costs of disposal and its value in use. The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. When the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
h. Intangibles
Intangible assets acquired separately or in a business combination are initially
measured at cost. The cost of an intangible asset acquired in a business
combination is its fair value as at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less any accumulated
amortisation and any accumulated impairment losses.
The useful lives of intangible assets are assessed to be either finite or indefinite.
Intangible assets with finite lives are amortised over the useful life and tested
for impairment whenever there is an indication that the intangible asset may be
impaired. The amortisation period and the amortisation method for an intangible
asset with a finite useful life is reviewed at least at each financial year-end.
Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset are accounted for prospectively
by changing the amortisation period or method, as appropriate, which is a change
in accounting estimate. The amortisation expense on intangible assets with finite
lives is recognised in profit or loss in the expense category consistent with the
function of the intangible asset.
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Intangible assets with indefinite useful lives or not yet available for use are not
amortised but are tested for impairment annually, either individually or at the
cash-generating unit level. The assessment of useful life is reviewed annually to
determine whether the indefinite life continues to be supportable. If not, the
change in useful life from indefinite to definite is made on a prospective basis.
A summary of the policies applied to the Group’s intangible assets is as follows:
i. Research and development costs
Research costs are expensed as incurred. Development expenditures are capitalised
as intangible assets when the Group can demonstrate:
• Costs can be reliably measured.
• Completion of the project is technically feasible.
• Resources are available to complete the project.
• There is an intention to use the resulting asset and it will generate future
economic benefits.
During the period of development the asset is tested for impairment annually.
j. Employee benefits
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries including non-monetary benefits, annual leave and
accumulating sick leave expected to be settled within 12 months of the reporting
date are recognised in respect of employees’ services up to the reporting date. They
are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised when the leave is taken
and are measured at the rates paid or payable.
Long service leave
The liability for long service leave is recognised and measured at the present value of
expected future payments to be made in respect of services provided by employees
up to the reporting date using the projected unit credit method. Consideration is
given to expected future wage and salary levels, experience of employee departures
and periods of service.
Defined contribution plans
Contributions made to a defined contribution plan are expensed as incurred.
Trademarks
Useful lives: Indefinite
Internally generated or acquired:Acquired
Intellectual property, marine farm and hatchery licences and marina berth
Useful lives: Finite
Amortisation method used:Straight line, five to thirty five years
Internally generated or acquired:Acquired
Computer Software
Useful lives: Finite
Amortisation method used:Straight line, four to seven years
Internally generated or acquired:Acquired
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New Zealand King Salmon — Annual Report FY24
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k. Contributed equity
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to
the issue of new shares or options are shown in equity as a deduction net of tax
from the proceeds. Other capital raising costs are expensed as incurred.
l. Revenue and income recognition
Revenue from contracts with customers
The Group is in the business of growing, processing and selling King Salmon to
customers in New Zealand and overseas. Revenue from contracts with customers
is recognised when control of the goods is transferred to the customer at the
amount that reflects the consideration to which the Group expects to be entitled
in exchange for those goods. The Group has generally concluded that it is the
principal in its revenue arrangements because it typically controls the goods before
transferring them to the customer.
NZ IFRS 15 established a five-step model to account for revenue arising from
contracts with customers and requires that revenue be recognised at an amount
that reflects the consideration to which an entity expects to be entitled in
exchange for transferring goods or services to a customer.
Interest income
Revenue is recognised as interest accrues using the effective interest method.
Insurance proceeds
Insurance proceeds are recognised in the financial statements when receipt is
virtually certain and can be measured reliably.
m. Taxes
Income taxes
Current tax assets and liabilities for the current and prior periods are measured at
the amount expected to be recovered from or paid to the taxation authorities based
on the current period’s taxable income. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively enacted by the balance
sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet
date between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
The carrying amount of deferred income tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred income tax asset to
be utilised. Unrecognised deferred income tax assets are reassessed at each balance
sheet date and are recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been enacted or substantively enacted
at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity
and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally
enforceable right exists to set off current tax assets against current tax liabilities
and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
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New Zealand King Salmon Annual Report FY24
Financial StatementsContents
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST,
except when:
• The GST incurred on a purchase of goods and services is not recoverable from
the taxation authority, in which case the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense item as applicable.
• Receivables and payables, which are stated with the amount of GST included.
• The net amount of GST recoverable from or payable to the taxation authority is
included as part of receivables or payables in the balance sheet.
• Commitments and contingencies are disclosed net of the amount of GST
recoverable from or payable to the taxation authority.
• The Group recognises uncertain tax positions as a liability where it is probable
that an outflow of resources will be required.
n. Share-based payments
Certain employees of the Group receive remuneration in the form of share-
based payments, whereby employees render services as consideration for equity
instruments (equity-settled transactions). The cost of equity-settled transactions
is determined by the fair value at the date when the grant is made using an
appropriate valuation model.
That cost is recognised in employee benefits expense, together with a corresponding
increase in equity (other capital reserves), over the period in which the service and,
where applicable, the performance conditions are fulfilled (the vesting period). The
cumulative expense recognised for equity-settled transactions at each reporting
date until the vesting date reflects the extent to which the vesting period has
expired and the Group’s best estimate of the number of equity instruments that will
ultimately vest. The expense or credit in the statement of comprehensive income
for the period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the conditions
being met is assessed as part of the Group’s best estimate of the number of equity
instruments that will ultimately vest. Market performance conditions are reflected within
the grant date fair value. Any other conditions attached to an award, but without an
associated service requirement, are considered to be non-vesting conditions. Non-
vesting conditions are reflected in the fair value of an award and lead to an immediate
expensing of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market
performance and/or service conditions have not been met. Where awards include a
market or non-vesting condition, the transactions are treated as vested irrespective
of whether the market or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense
recognised is the grant date fair value of the unmodified award, provided the original
terms of the award are met. An additional expense, measured as at the date of
modification, is recognised for any modification that increases the total fair value of the
share-based payment transaction, or is otherwise beneficial to the employee. Where an
award is cancelled by the entity or by the counterparty, any remaining element of the
fair value of the award is expensed immediately through profit or loss.
4. New Standards Adopted and Standards Issued Not Yet Adopted
a. New standards adopted and interpretations
No new standards, amendments or interpretations that have been issued and are
effective have had a significant impact on the the Group in these financial statements.
No new standards, amendments or interpretations that are not yet effective have been
early adopted by the Group in these financial statements and are not expected to have
a material impact on the Group’s financial statements.
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5. Impairment
In FY23 consideration was given to the status of development projects in light of
appeals relating to the Blue Endeavour consent. The appeals raised uncertainty on
timing to complete this capital project. As a result, the capitalised development costs
were written off at 31 January 2023. In FY24 there have been no impairments related
to developments in progress.
6. Other Income
20242023
Other income$000$000
Grants received 99 205
Profit on sale of property, plant and equipment25-
Release of early closed out foreign exchange contracts from OCI6,7287, 7 7 5
Other income1,213597
Total other income8,065 8,577
20242023
Other expenses include:$000$000
Reversal of impairment(61) (78)
Research costs323 473
Net loss on sale of assets -15
Directors’ fees599 520
Other directors’ expenses45
Donations35
20242023
Finance income$000$000
Interest income1,051 337
Total finance income1,051 337
Finance costs
Bank facility fees87452
Interest on bank loans and overdrafts98838
Interest on leases211209
Total finance costs3961,499
7. Expenses
20242023
Compensation of key management personnel of the Group$000$000
Short-term employee benefits (including contractual obligations on
resignation & exit payments)
2,8292,946
Share based payment expense26(375)
Post employment pension and medical benefits2592
Total compensation of key management personnel of the Group2,8802,663
20242023
Impairment$000$000
Development in progress- 507
Total impairment- 507
8. Finance Income and Costs
20242023
Employee benefits expense$000$000
Wages and salaries35,68635,096
Defined contribution plan expenses923885
Restructuring costs-300
Other employee benefits expenses3,2102,763
Outsourced labour2,6232,182
Total employee benefits expense42,442 41,226
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New Zealand King Salmon Annual Report FY24
Financial StatementsContents
20242023
Recognised in the consolidated statement of comprehensive income$000$000
Current income tax expense894 129
Deferred tax relating to origination and reversal of temporary differences10,71494
Total income tax expense / (credit) in the statement of
comprehensive income
11,608 223
Deferred tax (expense)/credit posted directly to other
comprehensive income
(2,259)(1,103)
Tax expense/(credit) posted directly to equity205 90
Reconciliation of tax expense to statutory income tax rate
Profit / (loss) before tax40,0602,114
Income tax using the company tax rate 28%11,217592
Non deductible/non assessable items4121
Unrecognised tax losses-(105)
Prior period adjustment444(266)
Adjustment for varying tax rates(124)(27)
Other differences308
Total tax expense / (credit)11,608223
Statement of financial position deferred tax assets and liabilities20242023
Deferred tax liabilities $000$000
Fair value adjustment to biological assets(12,536)(8,632)
Unrealised gains on foreign currency hedges(1,065)(1,684)
Increase accounting cost for finished goods(880)(69)
Right-of-use assets(1,868)(1,208)
Total deferred tax liabilities(16,349)(11,593)
9. Income Tax
20242023
Deferred tax assets$000$000
Accelerated depreciation for tax purposes2,0412,327
Lease liabilities1,9321,265
Provision for doubtful trade debtors118
Provision for employee benefits752692
Share based payments-205
Tax losses1,6075,350
Unrealised losses on foreign currency hedges1,8452,088
Other provisions430567
Total deferred tax assets8,60812,512
Net deferred tax assets (liabilities)(7,741)919
Statement of comprehensive income impact of
deferred tax assets and liabilities
20242023
Deferred tax liabilities$000$000
Fair value adjustment to biological assets3,9041,803
Unrealised gains on foreign currency hedges(619)437
Increase accounting cost for finished goods811(235)
Right-of-use assets6601,208
4,7563,213
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New Zealand King Salmon Annual Report FY24
Financial StatementsContents
20242023
Movement in reserves$000$000
Forward currency contracts
Reclassification during the period to profit or loss(25) 42
Income tax effect--
Realised/unrealised net gain/(loss) during the period(1,340)3,836
Income tax effect9375(1,074)
Release of early closed out foreign exchange contracts(6,728)(7,775)
Income tax effect91,8842,177
Currency translation differences--
Translation of foreign operations(18)334
Net movement in other comprehensive income(5,852)(2,460)
Imputation credit account
The imputation credit account balance in the Group as at 31 January 2024 is $10,545k
(31 January 2023: $10,549k).
10. Components of Other Comprehensive Income
11. Earnings Per Share
Basic earnings per share amounts are calculated by dividing the profit for the period
attributable to shareholders of the Company by the weighted average number of
ordinary shares on issue during the period. Diluted earnings per share are calculated
by dividing the profit attributable to shareholders of the Company by the weighted
average number of ordinary shares outstanding during the year plus the weighted
average number of shares that would be issued on conversion of all dilutive potential
ordinary shares into ordinary shares.
20242023
Earnings per share$000$000
Profit / (Loss) attributable to ordinary equity holders 28,452 1,891
# of Shares# of Shares
000000
Weighted average number of ordinary shares for basic and diluted
earnings per share
541,455431,642
Basic earnings per share $0.05 $0.00
Diluted earnings per share $0.05 $0.00
20242023
Deferred tax assets
Accelerated depreciation for tax purposes286278
Lease liabilities(667)(1,265)
Provision for doubtful trade debtors1724
Provision for employee benefits(60)205
Tax losses3,743(4,024)
Unrealised gains on foreign currency hedges243637
Other provisions137(77)
3,699 (4,222)
Deferred tax expense /(credit)8,455(1,009)
In FY21 and FY22 the money foreign exchange contracts were closed out early and
recognised in the hedge reserve. As the foreign currency contracts come to their
original term date they have been recognised in other comprehensive income along
with the tax impact.
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New Zealand King Salmon Annual Report FY24
Financial StatementsContents
12. Cash and Cash Equivalents
20242023
Trade and other receivables$000$000
Trade receivables13,968 13,492
Allowance for expected credit losses-(63)
Prepayments2,991 2,518
GST receivable1,455-
Other receivables13626
Total trade and other receivables18,427 16,573
Trade receivables generally have 20-30 day terms and are recognised at their realisable value.
20242023
Ageing analysis of trade receivables$000$000
> 90 days overdue311 84
61 - 90 days overdue3629
31 - 60 days overdue246264
< 30 days overdue2,9853,795
Not yet due10,3909,320
Total receivables13,96813,492
20242023
Inventories$000$000
Raw materials11,995 6,419
Work in progress1,816 1,554
Finished goods23,248 21,756
Total inventories37,059 29,729
The carrying value of finished goods as at 31 January 2024 includes a fair value uplift at point of harvest of $8,326k
(2023: $6,891k) and net realisable value provision of $5,066k ( 2023: $5,631k).
20242023
Amount of inventories recognised as an expense in the statement of
comprehensive income
$000$000
Cost of inventories recognised as an expense171,808 166,742
Movement in net realisable value provision (605) (2,085)
Total cost of goods sold including fair value uplift at point of harvest171,203 164,657
14. Inventories
The cost of inventories recognised as an expense for the year ended 31 January 2024 includes a fair value uplift
at point of harvest of $ 53,896k (2023: $45,977k). This cost is included in cost of goods sold in the Statement of
Comprehensive Income.
The cost of inventory includes fish harvested at the fair value less cost to sell at harvest date, based on
management’s expected future sales pricing and mix of product (“deemed cost”). As at 31 January 2024 no
volumes were forecasted to be sold at returns materially below deemed cost plus further manufacturing costs.
20242023
Cash and cash equivalents$000$000
Cash at bank and on hand9,421 5,341
Short-term deposits11,48712,680
Cash in solicitor’s trust account relating to sale of Waiau hatchery-1,200
Total cash and cash equivalents20,908 19,221
Cash at bank earns interest at the bank’s floating rate. Short-term deposits
are made for varying periods between 1 and 3 months, depending on the cash
requirements of the Group, and earn interest at the respective term deposit rates.
13. Trade and Other Receivables
Receivables impairment$000$000
As at beginning of the year63141
Reversal of unused amounts(63)(78)
As at year end-63
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New Zealand King Salmon Annual Report FY24
Financial StatementsContents
15. Biological Assets
The Group has two hatcheries in the South Island and six operational marine salmon
farms in the Marlborough Sounds. The fish livestock typically grow for up to 31 months
before harvest.
CostValue GainTotal
Biological assets$000$000$000
As at 1 February 202342,88129,811 72,692
Increase due to biological transformation
1
85,94959,597 145,546
Decrease due to harvest
2
(66,510)(55,330)(121,840)
Decrease due to mortality
3
(12,628)-(12,628)
Changes in fair value
4
-10,690 10,690
As at 31 January 202449,69244,768 94,460
CostValue GainTotal
Biological assets$000$000$000
As at 1 February 202250,575 24,386 74,961
Increase due to biological transformation77,712 42,967 120,679
Decrease due to harvest(59,463) (44,203) (103,666)
Decrease due to mortality(25,943) -(25,943)
Changes in fair value-6,661 6,661
As at 31 January 202342,881 29,811 72,692
20242023
Biological assets$000$000
Current 82,468 60,348
Non-Current 11,992 12,344
As at year end94,46072,692
20242023
Fair value gain/(loss) recognised in profit and loss$000$000
Gain arising from growth of biological assets59,59742,967
Movement in fair value of biological assets10,6906,661
Total fair value gain on biological transformation70,28749,628
20242023
Estimated closing biomasstonnestonnes
Closing fresh water stocks176163
Closing sea water stocks5,2034,457
Total estimated closing biomass live weight as at year end5,3794,620
20242023
tonnestonnes
Total live weight harvested for the year7,0886,834
1 Biological transformation fair value is impacted by volume increases and fish weight at reporting date relative
to the target fish harvest weight of 4 kgs (proportional recognition).
2 Harvested fair value is included in cost of goods sold in the statement of comprehensive income and is
calculated by multiplying the current period’s harvest (biomass) by the prior period’s estimated gross margin
per kg (recognised at 100%).
3 Mortality cost is expensed directly to the statement of comprehensive income within the cost of goods sold in
the period which it occurs and is not subject to a fair value uplift.
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).
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Financial StatementsContents
Fair value measurement
Measurement of fair value is performed using a fair value model. The method of
valuation therefore falls into level three 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
stock including increasing climate change volatility, 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 Group has insurance to cover some of the risks
relating to the livestock.
The estimated unrealised fair value gain on livestock at 31 January 2024 has
increased due to an increase of stock on hand as at 31 January 2024. Mortality
assumptions made in the fair value model are in line with the mortalities
experienced in FY24. Price increases made through FY24 are forecasted to hold
as inflationary pressures ease. 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 increase/decrease the fair value of biological assets on hand
and profit before tax by $18.3m (2023: $14.6m) (excludes the impact of finished
goods), while a 15% increase/decrease in future harvest volume would increase/
decrease the fair value of biological assets on hand and profit before tax by $ 6.8m
(2023: $2.2m).
A 15% increase/decrease in costs to sell would decrease/increase the fair value of
biological assets on hand and profit before tax by $ 11.5m (2023: $13.6m). 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.
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New Zealand King Salmon Annual Report FY24
Financial StatementsContents
16. Property, Plant and Equipment
NoteFreehold land and
buildings
Plant, equipment
and fittings
Vehicles and sea
vessels
Capital work
in progress
Total
Cost$000$000$000$000$000
As at 1 February 202214,258 89,523 3,728 12,424 119,933
Additions---4,558 4,558
Disposals(761) (1,422) (183) -(2,366)
Transfers from WIP2,548 8,606 -(11,154) -
As at 31 January 202316,045 96,707 3,545 5,828 122,125
Additions---6,0486,048
Disposals-(1,132)(294)-(1,426)
Transfers from WIP1,0685,4051,865(8,338)-
As at 31 January 202417,113100,9805,1163,538126,747
Depreciation and impairment
As at 1 February 20223,51363,1862,614-69,313
Depreciation6445,032139-5,815
Disposals(144)(888)(147)-(1,179)
As at 31 January 20234,01367,3302,606-73,949
Depreciation6295,056170-5,855
Disposals-(1,106)(286)-(1,392)
As at 31 January 20244,64271,2802,490-78,412
Net Book Value
As at 31 January 202312,03229,3779395,82848,176
As at 31 January 202412,47129,7002,6263,53848,335
Property, Plant and Equipment is stated
at historical cost less depreciation and
any impairment adjustments. Historical
cost includes expenditure that is directly
attributable to the acquisition of Property,
Plant and Equipment. Asset residual
values and useful lives are reviewed, and
adjusted if appropriate, at each balance
date or whenever events or changes in
circumstances indicate that the carrying
amount may not be recoverable.
Borrowing costs
There were no borrowing costs capitalised
in year ending 31 January 2024 (2023: $nil).
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New Zealand King Salmon Annual Report FY24
Financial StatementsContents
Note
Development in
progressTrademarks
Farm and
hatchery
licensesSoftwareGoodwillTotal
Cost$000$000$000$000$000
As at 1 February 20225,587242 4,359 5,604 39,255 55,047
Additions507--157 -664
Disposals--(150) --(150)
Transfers from WIP------
As at 31 January 20236,094 242 4,209 5,761 39,255 55,561
Additions224--33 -257
Disposals------
Transfers from WIP(33)----(33)
As at 31 January 20246,285242 4,209 5,794 39,255 55,785
Amortisation and impairment
As at 1 February 20225,587213 2,153 3,946 39,255 51,154
Amortisation--115 397 -512
Impairment5507----507
Disposals--(98) --(98)
As at 31 January 20236,094213 2,170 4,343 39,255 52,075
Amortisation--107 321 -428
Impairment5------
Disposals------
As at 31 January 20246,094213 2,277 4,664 39,255 52,503
Net Book Value
As at 31 January 2023-29 2,039 1,418 -3,486
As at 31 January 202419129 1,932 1,130 -3,282
17. Intangibles
Trademarks
Trademarks are externally
acquired and are carried
at cost less impairment.
They have indefinite useful
lives and are assessed
annually for impairment.
No impairment has been
recognised during the year
(2023: $nil).
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New Zealand King Salmon Annual Report FY24
Financial StatementsContents
Land and
Buildings
Motor
Vehicles
Plant and
EquipmentTotal
Cost$000$000$000$000
As at 1 February 20227,037 1,228 1,597 9,862
Additions-210 618 828
Disposals(1,433) (516) (1,082) (3,031)
Remeasurement304 6 1311
As at 31 January 20235,908 928 1,134 7,970
Additions2,785 489 162 3,436
Disposals- ---
Remeasurement219 --219
As at 31 January 20248,912 1,417 1,296 11,625
Depreciation
As at 1 February 20222,336 582 1,200 4,118
Depreciation1,026 264 296 1,586
Disposals(534) (466) (1,050) (2,050)
As at 31 January 20232,828 380 446 3,654
Depreciation724283 2951,302
Disposals----
As at 31 January 20243,552 663 7414,956
Net Book Value
As at 31 January 20233,080 548 688 4,316
As at 31 January 20245,360 754 555 6,669
Land and
Buildings
Motor
Vehicles
Plant and
EquipmentTotal
$000$000$000$000
Lease liabilities at 1 February 20224,859 638 436 5,933
Additions-209 618 827
Disposals(924) (25) (31) (980)
Remeasurement304 61311
Interest for the period1752212209
Lease payments made(1,149) (292) (340) (1,781)
Lease liabilities as at 31 January 20233,265 558 696 4,519
Additions2,784 489 162 3,435
Disposals- ---
Remeasurement210--210
Interest for the period1652422211
Lease payments made(857) (303) (315) (1,475)
As at 31 January 20245,567 768 565 6,900
18. Right-of-use Assets19. Lease Liabilities
20242023
Lease liabilities$000$000
Current1,028 1,191
Non-current5,8723,328
Total lease liabilities 6,900 4,519
Short term leases
The Group recognised $590k of payments for short term lease equipment in the year
(2023: $771k).
Total lease payments
The Group had total cash outflows for leases of $2,065k in 2024 (2023: $2,552k)
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New Zealand King Salmon Annual Report FY24
Financial StatementsContents
20. Interest Bearing Loans and Borrowings
21. Trade and Other Payables
The Company cancelled it’s BNZ facility $6.5m in August 2023. The Company retains
the Business Finance Scheme Loan via BNZ for $5m (expiry October 2025) that arose
from the Government providing financial assistance following the Covid-19 pandemic.
At 31 January 2024 the balance drawn on the Business Finance Scheme was $2.75m
(31 January 2023: $3.5m).
20242023
Current interest bearing loans and borrowings$000$000
Secured bank loans750 750
Other borrowings2,667 -
Total current interest bearing loans and borrowings3,417 750
Non-current interest bearing loans and borrowings
Secured bank loans2,0002,750
Total non-current interest bearing loans and borrowings2,0002,750
20242023
$000$000
Trade payables15,480 11,327
Other payables1,056 2,335
Total trade and other payables16,536 13,662
20242023
Current employee benefits$000$000
Bonuses1,160 982
Employee annual and sick leave benefits 2,540 2,218
Long service leave274265
Total current employee benefits3,974 3,465
Non-current employee benefits
Long service leave472501
Total non-current employee benefits472501
22. Employee Benefits
23. Commitments and Contingencies
Capital commitments
The Group has entered into agreements to purchase plant and equipment. As at 31
January 2024 the total commitment is $921k (2023: $58k).
Guarantees
The Group has three guarantee facilities totaling $128k (2023: $131k).
Long service leave
Long service leave provisions are calculated based on the expected future payments
to employees, discounted to their net present value.
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24. Risk Management
The Group’s activities expose it to a variety of risks: market risk, credit risk,
liquidity risk and climate change risk. The Audit,Finance and Risk Committee has
responsibility for the oversight of all risk domains, which includes managing climate
risk, as delegated by the Board. The Group uses derivative financial instruments
to hedge certain risk exposures. Financial risk management is the responsibility of
the Chief Financial Officer in accordance with the Treasury Policy approved by the
Board of Directors.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial
instrument will fluctuate because of changes in market prices. This comprises of
two key types of risks; currency and interest rate risk.
Currency risk
The Group has exposure to foreign exchange risk as a result of transactions
denominated in foreign currency, arising primarily from normal trading activities,
but also from the net investment in the foreign subsidiary.
The Group manages its foreign currency risk by hedging its future exposure in
respect of its import purchases and its export sales, over a maximum of five years,
when exposures are considered highly probable. The Group hedges this exposure
with the use of forward foreign exchange contracts and options. The Group has
a policy of hedging foreign exchange exposures within a range of hedging limits
broadly summarised as follows: Up to two years – 15% to 100%, two to five years –
0% to 50%. The notional contract amounts of forward foreign exchange contracts
and options outstanding at balance date were $37.5m on the import side ( 2023:
$39.8m) and $279.5m on the export side (2023: $273.1m), for delivery over the next
five financial years, in line with anticipated payment dates.
The Group imports nearly all of its feed from Australia, purchases of which are in
Australian dollars. In order to protect against exchange rate movements and to
manage the inventory costing process, the Group has entered into forward exchange
contracts to purchase Australian Dollars. The Group exports salmon to many
countries, the major ones being Australia, Japan and the United States. Sales are
denominated in Australian dollars (AUD), Japanese yen (JPY) and United States
dollars (USD) respectively. In order to protect against exchange rate movements
and to manage the inventory costing process, the Group has entered into forward
exchange contracts and options to hedge the net exposure to AUD, JPY and USD
respectively.
The cash flows are expected to occur up to 60 months from 1 February 2024.
Realised gains /losses on exercise of foreign exchange contracts and options is
recognised within revenue when the hedged transactions occur.
Foreign exchange forward contracts are designated as hedging instruments in cash
flow hedges of highly probable forecast sales in USD, AUD and JPY and forecast
purchases in USD, and AUD. The Group has typically hedged 50-55% of the net
exposure of these forecast transactions. The foreign exchange forward contract
balances vary with the level of expected foreign currency sales and purchases and
changes in foreign exchange forward rates.
There is an economic relationship between the hedged items and the hedging
instruments as the terms of the foreign exchange and commodity forward contracts
match the terms of the expected highly probable forecast transactions (i.e., notional
amount and expected payment date). The Group has established a hedge ratio of
1:1 for the hedging relationships as the underlying risk of the foreign exchange and
commodity forward contracts are identical to the hedged risk components. To test
the hedge effectiveness, the Group uses the hypothetical derivative method and
compares the changes in the fair value of the hedging instruments against the
changes in fair value of the hedged items attributable to the hedged risks.
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The hedge ineffectiveness can arise from:
• Differences in the timing of the cash flows of the hedged items and the
hedging instruments.
• Different indexes (and accordingly different curves) linked to the hedged risk
of the hedged items and hedging instruments.
• The counterparties’ credit risk differently impacting the fair value movements
of the hedging instruments and hedged items.
• Changes to the forecasted amount of cash flows of hedged items and
hedging instruments.
The NZ dollar equivalent of unhedged currency risk on assets at balance date
31 January 2024 is $3,475k (2023: $1,137k) whilst the NZ dollar equivalent of
unhedged currency risk on liabilities at balance date 31 January 2024 is $nil.
(2023: $nil).
Currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change
in AUD, USD and JPY exchange rates. The impact on the Group’s pre-tax profit is
the result of a change in fair value of monetary assets and liabilities. The impact
on the Group’s equity is due to changes in the fair value of forward exchange
contracts and options designated as cash flow hedges.
Change in
AUD rateEquityProfit
$000$000$000
2024+10%(3,273) 198
-10%4,000 (242)
2023+10%(3,603) 193
-10%4,403 (236)
Change in
USD rateEquityProfit
$000$000
2024+10%16,356 1,263
-10%(20,743) (1,543)
2023+10%13,519 658
-10%(16,887) (805)
Change in
JPY rate
EquityProfit
$000$000
2024+10%811 40
-10%(938) (49)
2023+10%1,257 51
-10%(1,513)(62)
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Interest rate risk
The Group has no exposure to interest rate risk. The Covid Recovery Business Finance
Scheme loan is fixed at a low rate for the term of the loan, and no other debt is drawn
as existing as at 31 January 2024, and interest swaps were all closed in FY23. The
Group cancelled its loan facility with BNZ in August 2023. The Group has a policy of
fixing interest rates within a range of 50% to 100% of the exposure.
Credit risk
Credit risk is the risk of financial loss that arises if a counterparty to a financial
instrument does not meet its contractual obligations. Financial instruments which
potentially subject the Group to credit risk principally consist of bank balances,
trade receivables, derivative financial instruments and financial guarantees.
Customer credit risk is managed centrally subject to the Group’s established
policy, procedures and control relating to customer credit risk management.
Credit quality of a customer is assessed based on an extensive external credit
rating scorecard and individual credit limits are defined in accordance with this
assessment. Outstanding customer receivables and contract assets are regularly
monitored and any shipments to major customers are generally covered by trade
credit insurance.
An impairment analysis is performed at each reporting date using the accounts
receivable aging report to measure expected credit losses. The impairment
analysis is based on days past due for all customers with coverage by trade credit
insurance. The calculation reflects the probability-weighted outcome, the time
value of money and reasonable and supportable information that is available at
the reporting date about past events, current conditions and forecasts of future
economic conditions. Generally, trade receivables are written-off if past due for
more than one year and are not subject to enforcement activity.
20242023
$000$000
Cash and short term deposits20,908 19,221
Trade and other receivables18,427 16,573
Other financial assets6,000-
Derivative financial assets--
Financial instruments are only entered into with banks that have in place an
executed International Swaps and Derivatives Association (ISDA) Master Agreement
with the Group.
Maximum exposures to credit risk as at balance date are:
The above maximum exposures are net of any recognised provision for losses.
Term deposit of $3m is held under a Specific Security Agreement with a second NZ
bank securing a derivatives agreement.
Concentrations of credit risk
Bank balances are maintained with National Australia Bank in Australia, PNC Bank
in USA, and with Bank of New Zealand and Kiwibank in New Zealand. There is a wide
spread of debtors, in terms of size and geographical location within New Zealand and
overseas. Concentration of credit risk in trade receivables is not considered significant
as the Group’s customers operate in different market channels and geographic areas.
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Liquidity risk
The Group performs cash flow forecasting activities on a daily basis to ensure it
has sufficient cash to meet operational needs and monitors performance against
bank covenants on a monthly basis. Surplus cash is invested in short-term or
money market deposits.
Undrawn committed facilities and/or liquid assets are maintained at all times
at an amount sufficient to cover the forecast cash payments to employees,
suppliers, tax authorities and banking institutions as they fall due.
Less than
one year
Between
one and
two years
Between two
and five yearsFive + years
As at 31 January 2024$000$000$000$000
Bank loans750 2,000 - -
Lease liabilities1,326 1,202 1,431 5,146
Trade and other payables16,536 ---
Other borrowings2,700---
Financial guarantee contracts132 ---
Total non-derivative liabilities21,4443,202 1,431 5,146
Forward foreign currency exchange
contracts
88,252 57,220 34,614 -
Forward foreign currency options 52,920 56,838 27,270 -
Total derivative liabilities141,172 114,058 61,884 -
Less than
one year
Between
one and
two years
Between two
and five yearsFive + years
As at 31 January 2023$000$000$000$000
Bank loans7507502000 -
Lease liabilities1,3421,020 1,2911,311
Trade and other payables13,662---
Financial guarantee contracts132 ---
Total non-derivative liabilities15,8861,7703,2911,311
Forward foreign currency exchange
contracts
76,678 48,834 8,702 -
Forward foreign currency options43,288 51,448 84,108 -
Total derivative liabilities119,966100,28292,810-
Climate risk
The Group recognises climate change will have a significant impact on our
operations. The key risks are both physical risks (climate and water temperature
impacting fish health) and transition risks resulting from the process of consumers
adjusting their taste and preferences towards a low carbon economy. During the
transition period, regulatory risk has also been identified, as the cost of compliance
is increasing and not showing any signs of stabilising. The Audit, Finance and Risk
Committee has responsibility for the oversight of all risk domains, which includes
managing climate risk, as delegated by the Board. An internal sustainability working
group is being established to develop the Groups strategic response to climate risk in
line with the new Aotearoa New Zealand Climate Standards released by the External
Reporting Boards (XRB) in December 2022.
The following table analyses the contractual cash flows for all financial liabilities
including proposed repayment of term debt with BNZ FY24 H1:
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25. 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 Business Finance Scheme Loan via BNZ is $2.75m (FY23:
$3.5m) and is considered a reasonable approximation of its fair value due to the short
term maturities of the drawings.
The following financial instruments of the Group are carried at fair value:
20242023
Current derivative financial assets$000$000
Forward exchange contracts534 1,341
Foreign exchange options442 565
Total current derivative financial assets976 1,906
Current other financial assets
Term deposits (4 -12 month term)6,000-
Total current other financial assets6,000-
Non-current derivative financial assets
Forward exchange contracts1,324 928
Foreign exchange options1,505 3,178
Total non-current derivative financial assets2,8294,106
Current derivative financial liabilities
Forward exchange contracts1,8882,123
Foreign exchange options1,751989
Total current derivative financial liabilities3,6393,112
Non-current derivative financial liabilities
Forward exchange contracts632369
Foreign exchange options2,3193,976
Total non-current derivative financial liabilities2,9514,345
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.
There were no transfers between Level 1 and Level 2 during the period ended 31
January 2024 (31 January 2023 - nil).
26. Capital Management
Group capital
The capital of the Group consists of share capital, reserves and retained
earnings /(deficit). The Group’s objectives when managing capital are to
safeguard the Group’s ability to continue as a going concern in order to provide
returns for shareholders, benefits for shareholders and to maintain an optimal
capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure the Group may adjust
dividends paid to shareholders, return capital to shareholders, issue new shares
or sell assets to reduce debt.
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27. Capital and Reserves
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 year 2024 (2023: No
divided was declared nor paid).
Retained earnings
Retained earnings represents the profits retained in the business.
Share based payment reserve
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.
Share capital20242023
Issued shares$000$000
Ordinary shares541,455 541,455
Total issued shares541,455 541,455
20242023
$000$000
Unrealised gain / (loss) 990 2,804
Realised gain / (loss) --
Total gain / (loss) on hedge reserves 990 2,804
# of SharesShare Capital
2024202320242023
Movement in ordinary share capital$000$000$000$000
The beginning of the period541,455 140,638 180,143 122,606
Share issue-400,817 - 57,537
Total share capital as at period end541,455 541,455 180,143 180,143
Reserves
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising
from the translation of the financial statements of the foreign subsidiary.
Hedge reserve
The hedge reserve represents the unrealised gains and losses on foreign currency
forward contracts that the Group has taken out in order to mitigate foreign currency
risks, net of deferred tax. Also included are the realised gains on early closed foreign
currency forward contracts where the hedged future cash flows are still expected to
occur (net of tax).
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28. Events After Balance Date
On 21 February 2024, former CEO Grant Rosewarne gave notice to exercise a Put
Option. The Put Option required NZK to acquire certain shares held by a family trust
associated with Mr Rosewarne that were originally acquired under long-term incentive
plans to enable repayment of a loan owed by Mr Rosewarne to NZK as part of those
long term incentive plans. Pursuant to that Put Option, NZK acquired and cancelled
3,272,437 ordinary shares on 28 February 2024, the proceeds of which have been
applied to the repayment of Mr Rosewarne’s loan balance.
No final dividend was declared in respect of the year ended 31 January 2024 (2023: Nil).
29. Related Party Disclosures
Subsidiaries
New Zealand King Salmon Investments Limited has the following trading subsidiaries.
The principal activity of The New Zealand King Salmon Co Limited 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.
At balance date Oregon Group Limited owned 39.55% (2023: 39.55%), China Resources
Ng Fung Limited owned 9.81% (2023: 9.81%) and NZ Superannuation Fund owned
8.91% (2023:9.08%) of the shares in New Zealand King Salmon Investments Limited.
SubsidiaryCountry of IncorporationEquity Interest
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
The following provides the total amount of transactions that were entered into with
related parties for the relevant financial year:
20242023
Related party payments$000$000
Good and services purchased from other related parties--
Director’s fees544475
Total related party payments544 475
Related party sales$000$000
Goods sold to related parties
1
2,3062
Total related party sales2,3062
Amounts owing to related parties20242023
Current amounts owing to related parties$000$000
Other amounts owing to related parties233233
Fees payable to directors5545
Total current amounts owing to related parties288278
Amounts owing by related parties$000$000
Amounts owing by related parties--
Total amounts owing by related parties--
1 During the period NZKS recommenced sales of King Salmon to China through China Resources Food Supply Chain
Co. Limited, 40% owned by China Resources Enterprise Limited, who is a shareholder of NZKS. The sales were
conducted on the same terms as an arms length transaction. Immaterial sales of salmon products were also made
to Directors during this period.
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30. Auditor’s Remuneration
Other Services include non-assurance services provided by EY in respect of Climate
Change and Sustainability Services for FY24 and for FY23 these related to tax advisory
services relating to a research and development funding workshop. Other assurance
services in FY23 included agreed upon procedures on sustainability information.
31. Reconciliation of Net Operation Cash Flow to Profits/(Loss)
32. Revenue From Contracts with Customers
a. Sale of goods with variable consideration
Some contracts for the sale of goods provide customers with volume rebates.
Under NZ IFRS 15, volume rebates give rise to variable consideration.
Volume rebates
The Group provides retrospective volume rebates to certain customers on the
quantity of product purchased during the period. The rebate is charged at time
of settlement. Therefore the Group does not see the need to recognise a refund
liability due to timeliness of the transaction.
b. Contract balances: contract liabilities
A contract liability is the obligation to transfer goods to a customer for which
the Group has received consideration from the customer. If a customer pays
consideration before the Group transfers goods to the customer, a contract
liability is recognised when the payment is made or when the payment is due
(whichever is earlier). Contract liabilities are revenue when the Group performs
under the contract.
The Group recognises revenue from the following major brand sources:
• Ōra King
• Regal
• Southern Ocean
• Omega Plus
• New Zealand King Salmon
20242023
$000$000
Audit fees349 296
Other assurance services-12
Other Services4012
Total auditor’s remuneration389 320
20242023
Reconciliation of the profit / (loss) for the period with the net cash
from operating activities
$000$000
Profit / (loss) before tax40,060 2,114
Adjusted for
Depreciation and amortisation7,5857,915
Impairment-507
(Gain)/loss on sale of assets(4)(4)
Release of early closed out foreign exchange contract close outs from
OCI
(6,728)(7,775)
Share-based payments(211)(292)
Net foreign exchange differences139(143)
Net loss /(profit) on derivative instruments at fair value through profit
or loss
(25)42
(Increase)/decrease in trade and other receivables and prepayments(1,854)3,244
(Increase)/decrease in inventories and biological assets(29,098)7,1 76
Increase/(decrease) in trade and other payables3,364(2,022)
Income tax paid(15)(287)
Net cash flow (to) / from operating activities13,21310,475
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c. Performance obligations
Information about the Group’s performance obligations
is summarised below:
Delivery to customer
The performance obligation is satisfied upon delivery of
salmon products to the customer, and payment terms
generally range between cash on delivery and 20th of
the month following invoice date.
On collection
The performance obligation is satisfied upon collection
of salmon products by the customer and payment terms
are generally on collection.
Receipt into store
The performance obligation is satisfied upon delivery
of salmon products when receipted into the customer’s
store and payment terms are generally on the 20th of
the month following invoice date.
CIF (cost, insurance, freight), into hold
The performance obligation is satisfied upon delivery of
shipping documents including either the bill of lading or
way bill dependent on transportation mode. Payment
terms generally range between 7 days from invoice date
and 20th of the month following invoice date.
20242023
Revenue by product group$000$000
Whole fish 92,996 77,489
Fillets, Steaks & Portions 45,801 39,005
Wood Roasted 7,202 11,060
Cold Smoked 25,517 24,153
Other 15,590 15,424
Total revenue by product group187,106 167,131
20242023
Revenue by brand$000$000
Ōra King 56,107 56,845
Regal 36,942 32,604
Southern Ocean 5,541 6,635
Omega Plus 3,396 4,606
New Zealand King Salmon 85,120 66,441
Total revenue by brand 187,106167,131
20242023
Revenue by geographical location of customers$000$000
New Zealand66,755 68,850
North America77,380 62,202
Australia20,906 15,988
Japan4,840 5,711
Europe5,043 6,391
Other12,182 7,989
Total revenue by geographical location of customers187,106167,131
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Sales net of settlement discounts to one major customer for the period
1 February 2023 to 31 January 2024 totalled $17.4m or 9.5% of total gross
revenue (For the period 1 February 2022 to 31 January 2023 one major
customer totalled $20.0m or 12.0% of total gross revenue).
33. Segment Information
Segment results
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.
Segment performance - Refer also Note 32 for detail of disaggregation of
revenue by product, brand and geographical area.
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Independent
Auditor’s Report
Independent auditor’s report to
the Shareholders of New Zealand
King Salmon Investments Limited
Opinion
We have audited the financial statements of New Zealand King Salmon
Investments Limited (“the company”) and its subsidiaries (together
“the group”) on pages 85 to 118, which comprise the consolidated
statement of financial position of the group as at 31 January 2024, and
the consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows
for the year then ended of the group, and the notes to the consolidated
financial statements including material accounting policy information.
In our opinion, the consolidated financial statements on pages 85 to
118 present fairly, in all material respects, the consolidated financial
position of the group as at 31 January 2024 and its consolidated financial
performance and cash flows for the year then ended in accordance with
New Zealand equivalents to International Financial Reporting Standards
and International Financial Reporting Standards.
This report is made solely to the company’s shareholders, as a body. Our
audit has been undertaken so that we might state to the company’s
shareholders those matters we are required to state to them in an
auditor’s 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 audit
work, for this report, or for the opinions we have formed.
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Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (New Zealand). Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report.
We are independent of the group in accordance with Professional
and Ethical Standard 1 International Code of Ethics for Assurance
Practitioners (including International Independence Standards) (New
Zealand) issued by the New Zealand Auditing and Assurance Standards
Board, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Ernst & Young performed pre-assessment procedures in relation to
greenhouse gas emissions of the group. Partners and employees of
our firm may deal with the group on normal terms within the ordinary
course of trading activities of the business of the group. We have no
other relationship with, or interest in, the group.
Key audit matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the consolidated financial
statements of the current year. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole,
and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. For each matter below, our description of how
our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s
responsibilities for the audit of the financial statements section of the
audit report, including in relation to these matters. Accordingly, our
audit included the performance of procedures designed to respond to
our assessment of the risks of material misstatement of the financial
statements. The results of our audit procedures, including the procedures
performed to address these matters below, provide the basis for our audit
opinion on the accompanying consolidated financial statements.
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Biological assets
Why significantHow our audit addressed the key audit matter
At 31 January 2024, the consolidated statement of financial
position includes biological assets (live salmon) of $94.5
million with an estimated biomass of 5,379 metric tonnes.
This asset is measured at its fair value less costs to sell and
includes a fair value increase above cost of $44.8 million.
This is a key audit matter because the group’s estimation
of the fair value of biological assets is assessed using
a valuation model that relies on significant estimation
including:
• year end biomass derived from the group’s livestock
model;
• future biomass growth to harvest;
• future fish mortalities;
• forecast sales prices;
• forecast costs to harvest date and of sale;
• forecast sales product mix; and
• use of a weight-based method to recognise the estimated
fair value gain at balance date
Disclosures in relation to biological assets are included in
Note 15 to the group financial statements.
In considering the valuation of live salmon we:
• evaluated the appropriateness of key estimations and assumptions and their
impact on the valuation assessment;
• agreed key estimation inputs used by the group in their valuation model to
supporting data and to board approved forecasts;
• involved our valuation specialists in the evaluation and testing of the mathematical
integrity of the calculations in the valuation model;
• challenged the appropriateness of model inputs compared to historical actual
values and considered the accuracy of previous forecasts; and
• considered post year end harvest mortality data to assess the impact, if any, on the
forecasts used in the valuation model.
In considering live salmon biomass at year end we:
• tested controls over fish count recording at the point of transfer from the
freshwater hatcheries to sea pens;
• considered the key inputs used by the group in estimating growth and biomass;
• tested controls over fish quantity and biomass adjustments in the livestock model;
• performed analytical procedures over feed conversion to biomass; and
• considered the accuracy of historical forecasts of average fish weight and quantity
recorded in the livestock model to actual fish harvest data.
We also considered the appropriateness and sufficiency of biological assets disclosures
included in the group financial statements.
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Finished goods inventory valuation
Why significantHow our audit addressed the key audit matter
At 31 January 2024, the consolidated statement of financial position
includes finished goods inventory totalling $23.2 million, net of a net
realisable value (NRV) provision of $5.1 million.
Cost of inventory includes the fair value of salmon at the point of harvest
and other processing costs.
The carrying value of inventory is assessed at balance date to consider
whether cost is in excess of NRV.
This is a key audit matter because of the judgement involved in the
estimation of both the fair value of salmon at the point of harvest and
in estimating future sales prices and costs necessary to make the sales in
determining NRV.
Disclosures in relation to inventories are included in Note 14 to the group
financial statements.
In considering inventory valuation we:
• assessed the calculation of the fair value of salmon at the point of
harvest included in the cost of finished goods inventory;
• assessed the calculation of other direct and processing costs included
in the cost of finished goods inventory;
• assessed the future sales inputs used in the NRV calculation by
comparison to the most recent historical sales amounts;
• compared the assessed NRV of a sample of inventory items to
subsequent selling amounts;
• assessed the calculation of estimated costs necessary to make the sale
included within the NRV calculation; and
• tested the mathematical accuracy of the NRV provision calculation.
We also considered the appropriateness and sufficiency of inventory
disclosures included in the group financial statements.
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Information other than the financial statements and
auditor’s report
The directors of the company are responsible for the Annual Report, which
includes information other than the consolidated financial statements
and auditor’s report.
Our opinion on the consolidated financial statements does not cover
the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the consolidated financial statements,
our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained during the
audit, or otherwise appears to be materially misstated.
If, based upon the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Directors’ responsibilities for the financial statements
The directors are responsible, on behalf of the entity, for the preparation
and fair presentation of the consolidated financial statements in
accordance with New Zealand equivalents to International Financial
Reporting Standards and International Financial Reporting Standards, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are
responsible for assessing on behalf of the entity the group’s ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance
with International Standards on Auditing (New Zealand) will always detect
a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
A further description of the auditor’s responsibilities for the audit of the
financial statements is located at the External Reporting Board’s website:
https://www.xrb.govt.nz/standards-for-assurance-practitioners /auditors-
responsibilities /audit-report-1/. This description forms part of our auditor’s
report.
The engagement partner on the audit resulting in this independent
auditor’s report is Brendan Summerfield.
Chartered Accountants
Christchurch
26 March 2024
123
New Zealand King Salmon — Annual Report FY24
Financial StatementsContents
Glossary
ASX
Australian Securities Exchange
CEO
Chief Executive Officer
EBIT
Earnings Before Interest and Tax
EBITDA
Earnings Before Interest, Tax,
Depreciation and Amortisation
FCR
Feed Conversion Ratio – the
amount of feed (in kilograms)
required to grow 1 kilogram of
fish weight
FMCG
Fast moving consumer goods
FOB
Free on Board, a term which
means that the price for goods
includes delivery at the seller’s
expense on to a vessel at a
named port and no further. The
buyer bears all costs thereafter
(including costs of sea freight)
FY
Financial Year
G&G
Gilled and Gutted weight.
Note that all volumetric
information presented is on
a gilled and gutted basis unless
otherwise stated
GAAP
New Zealand Generally Accepted
Accounting Practice
Group
New Zealand King Salmon
Investments Limited and its
subsidiaries
IPO
Initial Public Offering
LTI Scheme
Long term incentive scheme
MT
Metric Tonnes
New Zealand King Salmon
New Zealand King Salmon
Investments Limited
N PAT
Net profit after tax, also reported
as net profit for the period in our
published financial results
NZ IFRS
New Zealand equivalents
to International Financial
Reporting Standards
NZX
New Zealand Stock Exchange
Pro-Forma Operating EBITDA
Pro-Forma Operating EBITDA refers
to earnings before interest, tax,
depreciation, amortisation after
allowing for pro-forma adjustments;
being the exclusion of the fair value
adjustments relating to fair value
gains or losses arising from the
application of NZ IAS-41 Agriculture
and NZ IAS-2 Inventory and the
early foreign currency contract close
outs. Pro-Forma Operating EBITDA is
a non-GAAP profit measure
124
New Zealand King Salmon — Annual Report FY24
Financial StatementsContents
---
FY24 INVESTOR PRESENTATION
FY24 FINANCIAL RESULTS
FY24 INVESTOR PRESENTATION
DISCLAIMER
1
The information in this presentation has been prepared by New Zealand King Salmon Investments Limited with due care and attention. However, to the maximum extent permitted by law, neither
New Zealand King Salmon Investments Limited nor any of its directors, employees, shareholders nor any other person shall haveany liability whatsoever to any person for any loss (including,
without limitation, arising from any fault or negligence) arising from this presentation or any information supplied in connection with it.
This presentation may contain projections or forward-looking statements regarding a variety of items. Such projections or forward-looking statements are based on current expectations, estimates
and assumptions and are subject to a number of risks, uncertainties and assumptions. There is no assurance that results contemplated in any projections and forward-looking statements in this
presentation will be realised and any forward-looking statements are subject to material adverse events, significant one-off expenses or other unforeseeable circumstances. As such, actual results
may differ materially from those projected in this presentation. No person is under any obligation to update this presentation at any time after its release to you or to provide you with further
information about New Zealand King Salmon Investments Limited.
Our results are reported under NZ IFRS. This presentation includes non-GAAP financial measures which are not prepared in accordance with NZ IFRS. The non-GAAP financial measures used in
this presentation include:
•EBITDA. We calculate EBITDA by adding back (or deducting) depreciation, amortisation, finance expense / (income), and taxation expense to net earnings
•EBIT. We calculate EBIT by adding back (or deducting) finance expense / (income), and taxation expense to net earnings
•Pro-Forma Operating EBITDA refers to earnings before interest, tax, depreciation and amortisation after allowing for pro-forma adjustments as described in the Appendix to this document
We believe that these non-GAAP financial measures provide useful information to readers to assist in the understanding of our financial performance, financial position and returns. They should
not, however, be viewed in isolation, nor considered as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP financial measures may not be comparable to similarly titled
amounts reported by other companies.
The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. Nothing in this presentation constitutes legal,
financial, tax or other advice. An investor should, before making any investment decisions, consider the appropriateness of the information in this presentation, and seek professional advice,
having regard to the investor’s objectives, financial situation and needs.
This presentation is solely for use of the party to whom it is provided.
FY24 INVESTOR PRESENTATION
PRESENTERS
2
Carl Carrington
Chief Executive Officer
Ben Rodgers
Chief Financial Officer
Graeme Tregidga
Chief Commercial Officer
Grant Lovell
GM Aquaculture
Mark Dewdney
Chair
FY24 INVESTOR PRESENTATION
EXECUTIVE SUMMARY
3
FY24
•FY24 Net profit after tax of $28.5m (FY23 $1.9m).GAAP results were positively impacted by a pre-tax fair value uplift in assets of $15.8m (FY23 of
$6.6m) and a pre-tax gain on the continued unwind of the early close out of FX contracts from FY21/FY22 of $6.7m (FY23 $7.8m)
•FY24 Pro-forma EBITDA profit of $24.5m (FY23 loss of $2.7m).(market guidance $23.5m - $27.5m)
•Second summer through the revised production model, mortalitycontinues to track within management's expectations (FY24 $12.6m vFY23
$25.9m).NZKS are still investing in R&D with the intention of further improving fish health outcomes (Continuation of vaccine development and
thermotolerance work)
•Long salmon life cycle (24 - 31 months) highlights lag between current decisions and outcomes. Following changes in the production model, NZK
experienced a temporary reduction in fish size in Q4FY24, which impacted export demand; this is not forecast to repeat in thefuture
•Focus remains on market choices (price and product optimisation) and cost discipline to optimise earnings from the existing business to increase the
self-funding component of the Blue Endeavour project
Blue Endeavour
•After 9 years and millions of dollars spent, the Blue Endeavour (BE) consent has been obtained
•Immediate next steps (FY25)
oCompletion of baseline monitoring
oBoard approval and ordering of pilot farm equipment (long lead times)
Balance sheet
•Balance Sheet remains strong with net cash on hand $24.2m
•FY25 Capex excluding BE pilot forecast at ~$14m (FY23 Capex $6.4m). Projects are focussed on BAU asset replacements to increaseresilience and
reducing risk.FY25 BE pilot capex estimatedat $9.6m
FY25 guidance
update & Dividends
•Pro-forma EBITDA guidance range of $26m to $32m
•FY24 expected harvest range ~6,800 MT – 7,200 MT
•Dividends will remainon hold for the foreseeablefuture as NZKS develops theBlue Endeavour project
FY24 INVESTOR PRESENTATION
FY24 PERFORMANCE
01
4
FY24 INVESTOR PRESENTATIONFY24 INVESTOR PRESENTATION
FY24 OPERATIONAL HIGHLIGHTS
$187
FY24
REVENUE OF
MILLION
6,238
METRIC TONNES
HARVESTED
DURING FY24
36%
GEOGRAPHIC SPREAD
OF REVENUE
3%
41%
11%
EUROPE
5%
3%
NORTH
AMERICA
ASIA EX JAPAN & CHINA
JAPAN
NEW
ZEALAND
AUSTRALIA
5
1
comparable numbers restated as NZKS is no longer reversing the impacts of NZ IFRS 16 leases as previously communicated
1%
CHINA
18.0
(7.1)
(73.2)
1.9
28.5
(80)
(60)
(40)
(20)
-
20
40
FY20FY21FY22FY23FY24
(Jun)(7 months -
Jan)
(Jan)(Jan)(Jan)
FY24 GAAP NPAT
26.7
10.9
8.7
(2.7)
24.5
-5
0
5
10
15
20
25
30
FY20FY21FY22FY23FY24
(Jun)(7 months -
Jan)
(Jan)(Jan)(Jan)
FY24 PRO-FORMA OPERATING EBITDA
1
155.3
95.2
174.5
167.1
187.1
FY20FY21FY22FY23FY24
(Jun)(7m - Jan)(Jan)(Jan)(Jan)
FY24 INVESTOR PRESENTATION
KEEPING OUR BRANDS RELEVANT
Creating innovative strategies for our markets:
Connecting with our end-users through:
•Focus on engagement with ŌraKing Ambassadors / key foodservice customers
•Global documentary screenings to tell our story creatively
•Focus to align advertising and promotional spend with sales growth and margin targets in each market
•In-house digital and social media programmes for our retail and foodservice brandsto maintain brand presence with
relevant audiences in the most cost-efficient way possible
•Continuously refresh Omega Plus digital, social media and ambassador programmes to increase brand presence in
the NZ and China market
•Focus on activating new specialty strategy for Omega Plus with engaging events and social media activity with key
retailers e.g. Animates
6
Regal Brand Insights
•Regal remains New Zealand’s #1 smoked salmon brand
1
proving consumer trust in the Regal brand and theexceptional
quality & consistency of our salmon and value-added product offerings
•Regal Epicurean continues to drive engagement amongst the younger demographic and directly contributing to our
overall positive market share across the Regal range.
1
panel survey data by Tracksuit Ltd. as at 31 January 2024
FY24 INVESTOR PRESENTATION
SALES PERFORMANCE
Continuing to target price and product optimisation
First half salesSecond half sales
Focusonsupplyingandmaintainingourkeymarketscontinues. Price
increaseshavebeenrequiredtooffsetinputcosts,despitethis,global
demandremainedstrong.
•NewZealandsalesvolumesrecoveredinthesecondhalfastradingis
nowstabilising. OurimportedAtlanticvolumeis showinggoodgrowth.
•NorthAmericanpremiumdemandcontinuestoperformstrongly. A
strongsecondhalfoftheyearsawdemandexceedtheavailablesupply
oftheidealsizeforthismarket.OurRegalbrandedretailsmoked
productscontinuetoperformwell,andwehaveexpandedour
distributionforsmokedproductsacrossNorthAmerica.
•PricingoptimisationinJapansawa slowerstartinthefirsthalf. Weare
rebuildingthismarketandprogresshasbeensolidforour
brandedrange.
•TheAsianmarketsperformedwellduringFY24.Demandis verystrong
forthelargersizedproductwhichisgloballysoughtafterwithdemand
exceedingtheavailablesupply.
•TheAustralianmarkethascontinuedtogrowstronglythroughoutFY24.
OursupermarketretailproductscontinuetoperformwellandNZKare
extendingdistributionfurtheracrosstheretailchains.
•Followingthepriceadjustmentsearlierin theyear,theEuropeanmarket
hasseena slowerrecovery.
•Chinaisanopportunityforgrowthaswedevelopourrelationshipwith
ourpartner. Likeothermarketsdemandis strongforlarge-sizedfish.
Domestic Market (MT)North America (MT)
Australia (MT)
Europe (MT)
Japan (MT)Asia (MT)Excludes Japan
7
FY24 INVESTOR PRESENTATION
FISH PERFORMANCE
•FY24 saw the Aquaculture adapted farming strategy complete its first full
financial year. This strategy of having the majorityof biomass in the Tory
Channel over summer and away from warmer water sites has proved successful
to date with significantly reduced mortalitycompared to previous years. This
improved performance has continued into FY25.
•The FY24 harvest volume was up slightly on FY23.Further increases are
forecast for FY25 as the new strategy is optimised, the revised harvest biomass
of our active farms sits at ~6,800 MT to 7,200MT.
•Feed prices remain high and volatile due to raw material ingredients and global
geo-political tensions.
•The second year of thermotolerance trials with our breeding stock has been
completed. The next steps are for the trial to be replicated at a sea farm this
coming year. As with all breeding-based initiatives, this is a long-term project.
8
SoundFarm
G&G Volume Harvested (MT)
FY24FY23
Queen Charlotte
Ruakaka962 736
Otanerau700 522
Tory Channel
Clay Point1,996 524
Te Pangu1,128 2,310
Ngamahau886 -
Pelorus Sound
Waitata533 1,306
Kōpaua (fallowed)-124
Waihinau (fallowed)-136
Forsyth (fallowed)-321
Freshwater
33 34
6,238 6,014
Biological Performance
FY24FY23% chg.
Harvest Volume (t)6,238 6,014 4%
Average Harvest Weight (Kg)3.24 3.12 4%
Feed Conversion Ratio (FCR)1.74 1.66 (5%)
Closing Livestock Biomass5,379 4,620 16%
Feed Cost ($ / Kg of feed)3.38 3.06 (10%)
FY19
FY20
FY21
FY22
FY23
FY24
Mortality Biomass
FY24 INVESTOR PRESENTATION
OUR SUSTAINABILITY DEVELOPMENTS
•NZKS’s first Climate-Related Disclosures (CRD) will be released for FY24 before the
end of May 2024
•A key project delivered as part of this sustainability journey, was building our base year
of carbon emissions for Scope 1, 2 and 3 emissions. This has been a significant
undertaking and we have engaged with external consultants to support us in this
process
•Another project that will support NZKS’s sustainability journey is the commissioning of
the ensilage plant to utilise our remaining organic waste streams. This project is due for
completion in early FY25.
•An industry wide NZ farmed King salmon Life Cycle Assessment was completed in
2023 showing salmon is a low carbon protein that is high in Omega-3s and essential
nutrients
•Submission of NZKS’s third Modern Slavery Report (Australian Modern Slavery Act
2018)
•Committed to reusable, recyclable or compostable packaging across our business
We continue to progress on our sustainability journey:
9
thinkstep-anz. (2023). LCA Report –King Salmon from New Zealand. Wellington: thinkstep-anz
FY24 INVESTOR PRESENTATION
FY24 RESULTS
02
10
FY24 INVESTOR PRESENTATION
FY24 HEADLINE FINANCIAL PERFORMANCE
Revenue – FY24 benefitted from a full year of the price increases executed in FY23 in
addition to price increases in FY24 reflecting the recovery of inflationary pressure on input
costs (feed and people). In addition to price increases, NZKS continues to look at margin
enhancement through product optimisation andmarket choices (i.e. re-entry into China in
FY24).
Gross Margin % – Increased on the prior period predominantly due to increased revenue
(as noted above) and a reduction in mortality cost. In addition to these factors the FY24
GAAP result was also positively impacted by a fair value gain due to a reduction in
forecasted mortalities and a consequential increase in the forecasted harvestable biomass.
EBITDA – Was positively impacted by the improved Gross Margin noted above. NZKS has
been able to hold overheads relatively consistent with the prior year noting the strong
inflationary environment. The current overhead run-rate is now higher as we have made
investments into additional corporate capability including a new CEO and Head of
Community Relationships and Communication, with some additional investments likely in
FY25 to round out the capability skillsets to take NZKS forward. In addition to the comments
above GAAP EBITDA also benefitted from gains on the continued unwind of the early close
out of FX contracts from FY21/FY22.
NPAT– increased on prior year mainly as a result of improved EBITDA, partially offset by an
increase in the tax expense.
11
1
A full reconciliation between GAAP and Pro-Forma results is shown on pages 22 and 23 of this presentation
Group Financial Performance
GAAPPro-Forma
1
NZ$000sFY24FY23% chg.FY24FY23% chg.
Volume Sold (t)5,899 5,837 1%5,899 5,837 1%
Revenue187,106 167,131 12%187,106 167,131 12%
Gross Margin65,378 30,623 113%49,591 24,035 106%
Gross Margin %35%18%27%14%
EBITDA46,990 11,698 <>24,475 (2,665)<>
EBITDA %25%7%13%-2%
EBIT39,405 3,276 <>16,890 (11,087)<>
NPAT28,452 1,891 <>12,242 (8,450)<>
FY24 INVESTOR PRESENTATION
PRO-FORMA
1
EBITDA COMPARISON
12
•Revenueis up due to a combination of market optimisation, product and customer mix, price increases and an increase in volume sold
•Cost of goods is up on prior year due to cost inflation and increase in volume. NZKS continue to manage inflationary pressures by looking at opportunities to optimise our
Aquaculture and Processing operations, however some of the inflationary increase in cost of goods sold can have up to an 18-month lag (salmon life cycle) before it shows
up in the P&L. The increase in cost of goods sold highlights the global inflationary environment of the last two years
•MortalityThe decrease in mortality from FY23 reflects both the previous summer's mortality (which started at the end of FY22 and carriedon into 1HY23) and also the
success of the new adapted farming model. As the first ‘clean’ year under this new model, FY24 is a fairer reflection of underlying mortality on a go-forward basis.
•Corporate costs is slightly down on the prior year reflecting an ongoing focus on cost control
1
Refer to pages 22 & 23 for full reconciliation between GAAP and Pro-Forma results
FY24 INVESTOR PRESENTATION
•NZKS’s balance sheet remains strong with net cash on hand of $24.2m. This balance sheet provides
NZKS with a great platform to continue to invest in the existing operations while considering growth
options.
•While the strong EBITDA performance provides the backbone of this improved cash position other areas
have also contributed to the current cash position:
►Tax losses carried forward –The cash position benefitted from the utilisation of the majority of
NZKS’s available tax losses, which was generated in FY22/FY23. There is a remaining tax loss
balance of ~$4m (gross) that is available to carry forward into FY25
►The build-up of Inventorywas predominately due to:
oAn increase in feed on hand due to the change in supplier terms with one feed supplier (no
longer consignment)
oAn increase in frozen whole fish consistent with the seasonal harvest strategy. This thawed
product provides input into our smoked and value-added products which enable NZKS to
maximise fresh sales outside the seasonal harvest period
►The increase in biological assets (outside of fair value adjustments) reflects an increase in biomass
at sea. The increase in biomass at sea is attributable to optimising the adapted farming strategy
(NZKS estimates closing biomass at sea 5,379 MT FY24 v 4,620 MT FY23, an increase of 16%). This
increase in biomass at sea represents a draw on working capital; however, based on our current
production model, now targeted at 6,800MT to 7,200MT, future drags (outside of input costs) are not
expected to be as large.
►NZ King Salmon invested ~$6.4m in capexduring FY24. This capex spend was below our FY25
budget due to delays in the delivery of some projects, which will now carry over into FY25.
13
BALANCE SHEET – SOLID PLATFORM FOR GROWTH
Group Financial Position
Jan–24Jan-23
NZ$000sAuditedAudited
Current Assets
Cash and equivalents26,908
1
19,221
Receivables18,42716,573
Taxation Receivable-164
Inventories37,05929,729
Biological Assets82,46860,348
Derivative financial assets9761,906
165,838127,941
Non-current Assets
Property, plant & equipment48,33548,176
Biological assets11,99212,344
Other12,78012,827
73,10773,347
Total Assets238,945201,288
Current Liabilities
Loans (external)3,417750
Lease Liabilities1,0281,191
Payables16,53613,662
Other8,6336,855
29,61422,458
Non-Current Liabilities
Loans (external)2,0002,750
Lease Liabilities5,8723,328
Other11,1644,846
19,03610,924
Total Liabilities48,65033,382
Net Assets190,295167,906
Net Cash / (Debt)24,15815,721
1
Cash and equivalents include $6m term deposits with maturities > 4 months
FY24 INVESTOR PRESENTATION
STRATEGY, FY25 & BLUE
ENDEAVOUR UPDATE
14
03
FY24 INVESTOR PRESENTATION
HEALTHY KAI
“We are proud to grow a product that is
recognized as a healthy, nutritious form of
protein.”
Fact: King salmon is an excellent source of
omega-3 and is packed full of nutrients
essential for good health.
HEALTHY ENVIRONMENTS
“We are dependent on a healthy environment for our
fish to thrive. Minimizing our environmental footprint
and working with our natural environment is core to
our business.”
Fact: New Zealand farmed King salmon has a lower
carbon footprint per 100g of protein than most other
land-based protein sources
HEALTHY COMMUNITIES
“We have been part of the fabric of TeTau Ihu for
over 30 years. We value our communities &
workforce(in the region and beyond) who are woven
into our company.”
Fact: We employ over 440 staff, and support our
communities through a range of sponsorships,
supplying product, scholarships, event support and
beyond. Our business creates ripples of positive
impact for multitudes of other businesses & groups.
HEALTHY ECONOMIES
“We are a significant contributor to our regional and
national economies, and our future plans will only
grow this contribution.”
Fact: Blue Endeavour could add around $300m per
year to NZs revenue. This will be vital for our
economy to invest in healthcare, education, social
services & law & order.
HEALTHY RELATIONSHIPS
“We have created an ecosystem of important
relationships that have helped us to achieve our success,
such as with customers, industry, government, iwi,
scientists, communities & councils. We will continue to
strengthen and invest in our relationships to achieve a
healthy future.”
CREATING A HEALTHIER WORLD
“We strive to grow healthy kai, healthy communities, healthy relationships, healthy environments, and healthy economies.
This will contribute to growing a healthier Aotearoa and ultimately a healthier world.”
15
FY24 INVESTOR PRESENTATION
NEW ZEALAND KING SALMON
CREATING A HEALTHIER WORLD
BUILD A STRONG FOUNDATION
We optimisereturns via excellence in customer
partnering and investment in brands, productivity,
resilience and innovation
FOCUS ON OUR FISH
We focus on fish health and growing our
aquaculture expertise, breeding
programmes, and capacity to increase our
supply of Ōragrade fish
PARTNER WITH CUSTOMERS
We build strong partnerships and customer
communities across a range of markets and
channels to optimisereturns and mitigate
geo-political risks
BUILD A SUSTAINABLE FUTURE
We are a responsible partner committed to
positive environmental and social outcomes. We
are in a constant process of evolving and
progressing for asustainable future
EXCELLENCE IN RISK MANAGEMENT
We have a strong culture and capability for risk
identification,control and mitigation to protect
the business and our team members
VALUE OUR PEOPLE
We have an inclusive, caring and
achieving culture where individuals
and teams strive to be the best they
can be
NURTURE HEALTHY RELATIONSHIPS
We are committed to developing our
relationships with mana whenua, communities,
customers, investors and other stakeholders
RESPECT THE WHOLE FISH
We strive to maximisethe utilisationand
value of the whole salmon
16
FY24 INVESTOR PRESENTATION
FY25 GUIDANCE & DIVIDEND UPDATE
17
$26m-$32m
FY25 Guidance
•FY25 guidance range provided as $26m – $32m.
•Our FY25 guidance is supported by:
oPricing: Run-rate of pricing in FY24 providing strong tailwinds going into FY25
oVolume Growth:The transition to our adapted farming strategy is now complete
meaning FY24 is our first full year under this model. Moving forward the revised
harvest biomass of our active farms is estimated at ~6,800 MT to 7,200 MT range.
•The performance of the underlying business continues to provide a strong platform from
which to develop and fund future growth strategies
•Budgeted capex for FY25 sits at ~$14m (excluding the Blue Endeavour pilot) this
incorporates carryover from FY24. Significant capex items include farm consent renewal
costs, completion of the ensilage plant, nets, and new automated processing machinery.
•Board has reconfirmedthatdividends will remainon hold for the foreseeablefuture as NZKS
develops theBlue Endeavour project
FY24 INVESTOR PRESENTATION
FY24FY25FY26FY27FY28
BE Pilot
Through to1st Harvest
Consent Confirmed
Baseline Monitoring
Confirm Infrastructure & Timeframes
Order Key Infrastructure
Mooring Installed
Pens Constructed & Launched
Up to 200K fish in Pelorus
Fish Relocated and farmed at BE
Return and Harvest from Pelorus
2nd Harvest from BE Pilot
18
+0-500T+0-400
BLUE ENDEAVOUR FIRST STEPS -PILOT
Resource consent was obtained 29 February 2024
The consent has a baseline monitoring period (12 months of monitoring in an
18-month period) before farming can be undertaken on-site. This monitoring
has commenced.
Once monitoring is complete NZKS intends to build a pilot farm on the site to
further test the business case for open ocean farming. This is specialist
equipment which has long lead times – NZKS intends to place orders for this
equipment in FY25
NZKS would look to complete two harvests from this Pilot farm before
committing to a progressive scaling up in order to best manage the risk
profile of this investment
FY24 INVESTOR PRESENTATION
19
BLUE ENDEAVOUR NEXT STEPS & SUPPORTING INFRASTRUCTURE
Blue Endeavour Farming
Provisional on the success of the Pilot Farm NZKS would look to phase expansion of Blue Endeavour to its full-
scale. At present the earliest indicative date for NZKS to begin scale up would be from FY29 with a target first
harvest at the end of FY31. There are a number of interdependent projects required to be delivered to achieve
these dates. A delay to any one of the projects could result in a delay in the timelines indicated above.
To operate BE at full scale the following infrastructure would be required:
•Pens, Nets and Moorings:scaling up from two pens in the pilot to ten pens per farm for each of the BE Farms
(BE1 and BE2).
•Barges: The two permanent farms at BE would each require a barge that would be predominantly for feeding and
feed storage.
•Transportation and Net Cleaning Vessels: At full-scale each farm will require support vessels for net cleaning
and diving operations. While the Pilot can be undertaken using a tow model between BE and the nursery/harvest
site this is not viable at full-scale and NZKS will need to procure a Well Boat.The ownership model for a Well Boat
will be assessed closer to the time of investment (buy v lease).
Supporting Infrastructure
Along with the seaborne infrastructure there are two other areas in which infrastructure investment is necessary to support a
full-scale BE farming model:
•Freshwater & Hatcheries: NZKS has sufficient freshwater infrastructure to support the first BE farm (BE1) however to
supply BE2 NZKS will require additional investment in freshwater capacity to supply smolt. NZKS is still working through
the most appropriate investments in this area.
•Processing: The current processing facility (owned) is 30-40 years old, inefficient and unable to process the BE volume.
NZKS are currently investigating the viability of a new Greenfield site. NZKS believe that the efficiencies from this site will
justify the investment even at current volume.
FY24 INVESTOR PRESENTATION
20
APPENDICES
04
FY24 INVESTOR PRESENTATION
EXISTING SEA FARM RESOURCE CONSENTS AND EXPIRY
FarmsRegionExpiry dateStatus
RuakakaQueen Charlotte2024Active
OtanerauQueen Charlotte2024
Active
Forsyth BayPelorus2024Fallow
WaihinauPelorus2024Fallow
Crail BayPelorus2024Fallow
Clay PointTory Channel2036
Active
Te PanguTory Channel2036
Active
WaitataPelorus2049
Active
NgamahauTory Channel2049
Active
KopauaPelorus2049Fallow
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•Five licenses are due for expiry or renewal at the end of 2024, all of which represent NZKS’s
warmer, low flow licenses at lower producing sites
•Crail Bay has not been farmed for around 10 years
•Kōpaua, Forsyth andWaihinauare currently fallowed
•Ruakaka and Otanerau form part of the updated production plan, receiving fish post summer
viatow operations from the Tory Channel farms
•The Marlborough District Council released its decisions on the provisions regulatingmussel
farming in Q2 2023.The provisions which relate to salmonfarming were withdrawn.The
Marlborough District Council is working with Iwi, the Government and the wider community to
work on new salmonfarming provisions to enablealignment with the NZ Aquaculture
Strategy.NZ King Salmon is involved in thesediscussions.The timing of that process
is uncertain
•Renewingthe 2024 farms will require applications to be lodged.Work on this has commenced
and theintention is that the applicationswill be lodged around mid-year. Should applications be
made under the National Environmental Standards for Marine Aquaculture, there will be limited
public notification
•Applications to make the remaining, high flow farms operate under a consistent set of consent
conditions will be lodged in the first half of FY25
•Farms will be able to operate on their current consents until all applications and appeals
havebeenresolved
FY24 INVESTOR PRESENTATION
FY24 RECONCILIATION BETWEEN GAAP RESULTS AND PRO-FORMA
FINANCIALS
22
FY24
NZD 000s
Statutory Financial
Statements
Fair Value
Adjustments
Early FX Close-outs
Pro-Forma Operating
Financial Information
Revenue187,106 187,106
Cost of goods sold(171,203)54,499 (116,704)
Fair value gain / (loss) on biological transformation70,287 (70,287)-
Freight costs to market(20,812)(20,812)
Gross Profit65,378 (15,787)- 49,591
Other operating income8,065 (6,728)1,337
Overheads
Sales, marketing and advertising(11,375)(11,375)
Distribution overheads(3,478)(3,478)
Corporate expenses(10,732)(10,732)
Other expenses(868)(868)
EBITDA46,990 (15,787)(6,728)24,475
Depreciation and amortisation(7,585)(7,585)
Impairment-
EBIT39,405 (15,787)(6,728)16,890
Finance income1,051 1,051
Finance costs(396)(396)
Net finance costs656 - - 656
Profit / (loss) before Tax40,060 (15,787)(6,728)17,546
Income tax (expense) / credit(11,608)4,420 1,884 (5,304)
Net Profit / (loss) for the Year28,452 (11,367)(4,844)12,242
FY24 INVESTOR PRESENTATION
FY23
1
RECONCILIATION BETWEEN GAAP RESULTS AND PRO-FORMA
FINANCIALS
23
1
FY23 numbers restated as NZKS is no longer reversing the impacts of NZ IFRS 16 leases as previously communicated
FY23
NZD 000s
Statutory Financial
Statements
Fair Value
Adjustments
Early FX Close-outs
Pro-Forma Operating
Financial Information
Revenue167,131 167,131
Cost of goods sold(164,657)43,040 (121,617)
Fair value gain / (loss) on biological transformation49,628 (49,628)-
Freight costs to market(21,479)(21,479)
Gross Profit30,623 (6,588)- 24,035
Other operating income8,577 (7,775)802
Overheads
Sales, marketing and advertising(12,245)(12,245)
Distribution overheads(3,463)(3,463)
Corporate expenses(10,854)(10,854)
Other expenses(940)(940)
EBITDA11,698 (6,588)(7,775)(2,665)
Depreciation and amortisation(7,915)(7,915)
Impairment(507)(507)
EBIT3,276 (6,588)(7,775)(11,087)
Finance income337 337
Finance costs(1,499)(1,499)
Net finance costs(1,162)- - (1,162)
Profit / (loss) before Tax2,114 (6,588)(7,775)(12,250)
Income tax (expense) / credit(223)1,845 2,177 3,798
Net Profit / (loss) for the Year1,891 (4,743)(5,598)(8,450)
FY24 INVESTOR PRESENTATION
APPENDIX – GLOSSARY OF TERMS
FY25Financial results for the 12 months from 1 February 2024 to 31 January 2025
FY24Financial results for the 12 months from 1 February 2023 to 31 January 2024
FY23Financial results for the 12 months from 1 February 2022 to 31 January 2023
EBITDAEarnings before interest, tax, depreciation and amortisation
FCRFeed Conversion Ratio – the amount of feed (in kilograms) required to grow 1 kilogram of fish weight
G&GGilled and gutted. Note that all volumetric information presented is on a gilled and gutted basis unless otherwise stated
GAAPGenerally Accepted Accounting Practice
MTMetric tonnes
NPATNet profit after tax, also reported as net profit for the period in our published financial results
NZKSNew Zealand King Salmon Investments Limited
Pro-Forma Operating EBITDA
Pro-Forma Operating EBITDA refers to earnings before interest, tax, depreciation, amortisation after allowing for pro-forma adjustments as described in the
Appendix to thisdocument. Pro-Forma Operating EBITDA is a non-GAAP profit measure
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FY24 INVESTOR PRESENTATION
UNDERSTANDING OUR GAAP RESULTS
The impact of NZ IAS-41 Agriculture and NZ IAS-2 Inventory
Our GAAP results are impacted by Fair Value gains or losses arising from the application of NZ IAS-41 Agriculture and NZ IAS-2 Inventory. The impact
of these standards are explained below:
Fair Value under NZ IAS-41 Agriculture andNZ IAS-2 Inventory
When we record a change in biomass at sea, or where the expected future profit we realise on fish that we sell changes, thesestandards require us to
quantify and recognise the gain or loss in the current period. This applies to both biomass at sea and inventories of finished products.
Our Statement of Financial Position shows biological assets at their fair value. Pro-Forma Operating Financial Performance removes gains / losses associated
with the application of these standards. The company will present Pro-forma results for future reporting periods on this basis.
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Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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