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    HUO   AU000000HUO7

HUON AQUACULTURE GROUP LIMITED

(HUO)
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Huon Aquaculture : Results Presentation 2021

08/25/2021 | 08:21pm EST

Huon Aquaculture Group Limited

Full Year Results Presentation

FY2021

Important Information

This presentation is provided by Huon Aquaculture Group Limited (ACN 114 456 781) to provide summary information about Huon Aquaculture Group Limited and its subsidiaries (Huon) and their activities as at the date of this presentation. The information in this presentation is of a general nature and does not purport to be complete and may change without notice. Undue reliance should not be placed on the information or opinions contained in this presentation for investment purposes as it does not take into account your investment objectives, financial position or needs. These factors should be considered, with professional advice, when deciding if an investment is appropriate.

The financial information includes non-IFRS information which has not been specifically audited in accordance with Australian Accounting Standards but has been extracted from the 2021 Full Year Financial Report (Appendix 4E). This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events. No representation, warranty or assurance (express or implied) is given or made by Huon that the forward looking statements contained in this presentation are accurate, complete, reliable or adequate or that they will be achieved or prove to be correct. Except for any statutory liability which cannot be excluded, Huon and its respective officers, employees and advisers expressly disclaim any responsibility for the accuracy or completeness of the forward looking statements and exclude all liability whatsoever (including negligence) for any direct or indirect loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission from it.

Subject to any continuing obligation under applicable law or any relevant listing rules of the ASX, Huon disclaims any obligation or undertaking to disclose any updates or revisions to any forward looking statements in these materials to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any statement is based. Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of Huon since the date of this presentation.

Huon Aquaculture | Results Presentation | August 2021

2

Agenda

  1. OVERVIEW
  2. FINANCIAL PERFORMANCE
  3. OPERATIONAL PERFORMANCE
  4. GROWING SUSTAINABLY
  5. OUTLOOK

Overview of Financial Performance

  • Financial Results for FY2021
    • Operating EBITDA of $16.7m compared to $47.3m pcp
    • The reduction in operating profit was primarily attributable to the impact of COVID through reduced salmon prices and increased freight charges
    • The reduction in market value below book value resulted in a $113.9m impairment charge (before tax)
  • Balance Sheet Initiatives
    • Placement and SPP in August 2020 raised $66 million to reduce debt and improve liquidity
    • Revised terms for Huon's banking facilities until June 2022 after which time the previous financial covenants will recommence
  • Outcome of Strategic Review
    • The Board initiated a strategic review in February 2021 to assess potential corporate level transactions in light of a number of unsolicited approaches
    • On 6 August Huon announced it had entered into a Scheme Implementation Deed with JBS to acquire 100% of Huon shares by way of a Scheme of Arrangement
    • On 13 August Huon entered a process agreement with JBS for the making of a recommended takeover bid.

COVID 19 Financial Impact

Net Revenue

Freight Expense

($'000)

($'000)

FY20 (Actual)

339,869

31,764

Volume Movement

70,110

3,492

- Domestic (Wholesale + Retail)

- Export

57,143

9,166

- Channel mix impact

6,400

-

FY21 (Excl. price impact)

473,522

44,422

Price Movement

(29,944)

(371)

- Domestic (Wholesale + Retail)

- Export

(10,769)

21,905

- Channel mix impact

(6,400)

-

FY21 (Actual)

426,409

65,956

FY21 COVID Variance

47,113

21,534

From FY2020 to FY2021

  • Revenue increased by $87m as result of both increased volumes and reduced price
  • The COVID related impact of this (price) reduced revenue by $47m from $473m to $426m
  • Freight costs increased by $34.1m due to increased volumes and higher costs
  • The COVID related impact accounted for $22m, or two-thirdsof this increase, as freight costs increased 49% on a per kg basis

Huon Aquaculture | Results Presentation | August 2021

4

Overview of Operating Performance

  • Market Conditions
    • Global oversupply of salmon due to reduced demand from the food services sector as a result of COVID restrictions
    • Average international salmon price in the first half fell 28% compared to the previous half but has since recovered
    • High cost of international freight a major contributing factor to weakened FY2021 performance
    • Forecast supply growth for calendar 2021 of 2.3%1 is lower than demand growth or historical supply growth
    • Both domestic and international markets for salmon remain in long term demand growth
  • Efficiency benefits
    • Efficiencies continued to be delivered with cost of production falling to $9.65/HOG kg
      • Cost of production in the first half of FY2021, the lowest in 5 years
    • Technology projects completed in the last three years have delivered:
      • increased smolt size to sea,
      • Improved growth and survival rates at sea, and
      • improved feed conversion rates

1 Kontali

  • Channel Mix
    • Revised target production of 35,000t for FY2021 as supply was managed to meet the disruption to demand as global markets slowly adjusted to operating in a COVID restricted environment
    • Increased production volumes sold into the export market where prices were severely depressed in the first half due to the global oversupply
    • The retail channel performed strongly with prices holding and record volumes delivered
      • Strong growth (+ 184%) in Huon's online sales, with returning customer rate up 12% on pcp
    • Wholesale volumes recovered despite disruption from the lock down in Victoria and the hotel, catering and event industry continuing to operate under restricted conditions
    • Contracted sales into international retail markets grew strongly, albeit at reduced prices, with good progress in diversifying markets throughout Asia and into the US

Huon Aquaculture | Results Presentation | August 2021

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Huon Aquaculture Group Ltd. published this content on 26 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 August 2021 00:20:08 UTC.


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Managers and Directors
Philip Wiese Chief Executive Officer
Thomas Haselgrove Chief Financial Officer & Secretary
Edison Alvares Director
John Berry Director
Brent Easterwood Director