Yep, will be participating for sure
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Gaynor with history of salmon on NZX
NZ Salmon, Regai Salmon and NZ King Salmon …….and a tomato company …and throws in mention of Blue Chip, Aquaria, SeaDragon and other illustrious names.
Prob paywalled but interesting
https://businessdesk.co.nz/article/o...ainst-the-tide
Odd that the rights are not being quoted on either exchange.
Yes, seems strange they took this option.
Wonder how this affects the trading pattern in the head shares. How will typical (varying degree) late stage convergence of heads and rights prices not being possible mean that heads will remain higher than they would have?
We won't know.
Balance, what's your take on NZK? Do you hold?
JBS think salmon farming in aus is worth it and is willing to assume the risks associated with it
A company as big and burly as JBS is typically not interested in throwing its money behind marginal or uncertain businesses
https://www.abc.net.au/news/rural/20...stry/100584728
Well sited Salmon farms in NZ around Stewart Island and South Island hydro canals do well.
Marlborough Sounds waters are too warm.
Cook Straight waters would work,but the set up costs,and ongoing costs would be challenging.
NZK do not have approval for such a farm.If they do get approval they will have a future.If not they will be dead in the water.
Do not hold.
May consider if they can get Blue Endeavor through - otherwise, NZK is in terminal decline.
Recall Direct Capital buying into NZK in 2009 for $50m and they were lucky to get out 8 years later in 2017 via the IPO for around the same amount!
Company stated their financial position was strong and sound when they reported their financial results for F21 - a year later and they are having to do a heavily dilutary capital raising - says a lot about the nature of the industry.
NZK is an excellent company, doing the best in an industry with too many uncontrollable variables - an industry which has bugger all government support to survive & thrive imo.
Salmon farming companies around the World are creaming it at the moment with prices having reached pretty insane levels this year https://salmonprice.nasdaqomxtrader....E19AA49E8FDC?0
NZK unfortunately is an uninvestable cot case as far as I am concerned and in terminal decline as Percy and Balance say above. Blue Endeavour will not change that.
reading there annual report
obviously demand is good , sales revenue is good and salmon pricing is good even looking ahead to future pricing
:scared: wow big blow out in costs last yr alright.
like they say they better rein in there cost base quite a bit since there down sizing some what
Excellent at blowing their own trumpet at least - the current situation is a case of bad management decisions coming back to bite them. Locations with climate issues and problems compounded by what appears to be over-stocking.
I agree with whoever above said it is uninvestable.
Maybe, yes, Higher Risk at a minimum. I also wonder about Blue Endeavor, and seem to recall some years back stories of tuna ranchers in Oz (South Aust?) who lost all their stock in storms, and Cook Straight is not a kind patch of water.
Does the reminder to participate email I just received mean the raise is going poorly?
The risk is obviously present but aquaculture is an industry I'm a sucker to have an exposure with. So I'm taking my full entitlement plus applying for 50% more. Gut feels it will be alright eventually :cool:
Obviously much better fish species to farm ... Europe farms trouts - a great way to produce large amounts of great quality fish in an easy and efficient way. However - NZ prefers to leave this opportunity to others. We are clever - leave the easy business to Europe and America and farm salmon instead and lose money.
That's incorrect - Europeans farm mostly Atlantic Salmon. Likewise, Chile and Australia. The Europeans do farm trout (freshwater) but it's a fraction vs farmed salmon.
NZ has successfully farmed King salmon for decades but now faces a crisis with warming water temperatures - something which can be overcome if the government allows more of the sea cages to be situated in deeper and colder waters (eg. Stewart Island & further out in Cook Straits).
Which part of my post was incorrect?
I never said that they don't farm salmon in Europe as well, but they do farm trout, which we in NZ choose not to do. We even made laws forbidding trout farming - I guess, how dumb is it to forbid the production of cheap healthy and environmentally friendly quality food?
The part of Germany I come from had a lot of trout farming but I never said that they don't farm salmon in Europe as well ... of course, they do, but not in areas which are unsuitable for salmon farming (as NZK does).
Just checked the stats ... more than 20% of European fish farming is fresh water fish (I assume mainly trout and a bit of carp) and more than 30 % is seawater fish (I assume mainly salmon). The balance seems to be shellfish. Most European salmon farming happens in really cold waters (mainly around Scandinavia and Iceland), not in the South of Europe (which would be from the water temperature more comparable to Marlborough Sounds). Clever the Europeans, aren't they?
And yes - NZ Salmons board and management team allowed the company to establish their farms on highly unsuitable sites in waters with poor circulation, which was always too warm and clearly would not get colder with global warming. Scientists explained the impact of global warming for the last 50 years, but NZK's board must have had more important things to do than checking the science crucial for their business. Or did they just lack in mental processing the facts ... I don't know?
How is this the fault of the government and what is the confidence level that these dinosaurs thought through what the environmental impact of their newest toy of implementing a salmon farm on high sea might be?
Hopeless - NZK clearly has little environmental competence. Who wants to allow them to generate the next disaster?
I think your comments are rather harsh considering the origins of NZK salmon farming go back to the early eighties. Not a lot of understanding or belief in climate change back then. Development of alternative sites has been in pipeline for a long time but regulatory barriers are a nightmare, Current government like most before them make big promises to overhaul the RMA to make it easier to progress things that they want (solve housing crisis, enable aquaculture industry to grow) however generally ends up in too hard basket.
Classic - bull picking a point which was never discussed and is irrelevant to the discussion but accusing me I don't know about it.
But hey - I assume you just want to demonstrate what people mean when they use the frequently used but highly un-PC term for bull droppings, don't you :p ?
Just wondering - do you happen to be a holder and need to take now the medicine you normally freely distribute to everybody else? Sometimes a change of perspective can be quite healthy ...
NZKS completes rights offer - NZX, New Zealand’s Exchange
New Zealand King Salmon Investments Limited (NZX/ASX: NZK) (NZ King Salmon) is pleased to announce the successful closure of its NZ$60.1m underwritten 2.85 for 1 pro rata rights offer (Rights Offer). NZ King Salmon received strong shareholder support with applications totalling approximately NZ$50.3m, representing Eligible Shareholders electing to take up approximately 83.6% of their entitlements under the Rights Offer. The shares will be issued at a price of NZ$0.15 per share (or A$0.14 per share).
A total of NZ$60.1m was raised under the Rights Offer as announced on 13 April 2022. The proceeds of the equity raise will be used to deleverage NZ King Salmon’s balance sheet and provide liquidity and funding for medium term operating requirements.
Grant Rosewarne, NZ King Salmon Managing Director and CEO, said “NZ King Salmon is delighted with the level of take-up by its Eligible Shareholders in the Rights Offer.”
Settlement and allotment of new shares taken up under the Rights Offer is expected to occur on 12 May 2022, with ASX shares expected to commence trading on 13 May 2022. The new shares issued under the Rights Offer will rank equally with NZ King Salmon’s existing shares.
Shortfall
A shortfall of approximately NZ$9.8m worth of shares out of a total Rights Offer size of NZ$60.1m remains. The shortfall will be allocated in priority to retail shareholders who over-subscribed NZ$3.5m through the Rights Offer, with the remainder being taken up by the underwriter, Jarden, or its sub-underwriters.
For further information in respect of the Rights Offer, please refer to the investor presentation released to the NZX and ASX on 13 April 2022.
Ends
Guess/hope I'll be getting my full 100% bonus entitlements I applied for then. Wording not 100% clear.Quote:
A shortfall of approximately NZ$9.8m worth of shares out of a total Rights Offer size of NZ$60.1m remains. The shortfall will be allocated in priority to retail shareholders who over-subscribed NZ$3.5m through the Rights Offer, with the remainder being taken up by the underwriter, Jarden, or its sub-underwriters.
So Jarden is sitting on a nice big potential profit when they realized the underwritten shortfall shares - $6.3m or 42m shares at 15c.
At today's price of 20c, that's a cool $2.1m.
Wealth transfer from NZK shareholders to Jardens.
To be fair though, there's still a lot of water to flow through the sea cages before Jardens can realize their profit from selling down 42m shares!
Well, with the 100% extra entitlement my average came waaaaaaaay down.
Now to hold on for Blue Endeavour ann.
I am not a holder, but I note that the guy who owns Akaroa Salmon is being interviewed on the Country Life program, National Radio Friday evening and Saturday morning 7 to 8 am.
New Zealand King Salmon reduces workforce by 139
https://i.stuff.co.nz/business/farmi...rkforce-by-139
NZK made a notable effort over the past decade to avoid redundancies via natural attrition & moving people within the company. $20m invested into farm re-location to support commercial growth and consequently jobs but not supported by govt. Unfortunate outcome for all.
NZK got no choice if they dont cut costs big time to reflect smaller operation the company wont last long.
Interesting timing with a Blue Endeavour decision imminent
Will be years before production ex Blue Endevour comes into processing. Most are factory jobs so likely affected by current mortality levels and drop in volumes.
Let's not forget that even granting the Blue Endevour permit would not mean a permit to print money for the company, but at best a permit to pour lots of new shareholders money into a never before done high risk project, which may or may not succeed.
If you like it is comparable to granting a mining permit to a new miner for an area where nobody knows the environmental risks nor the ore grades.
But even if blue endeavor gets its permit and succeeds - at best it would bring NZK back on a somewhat level playing field with other companies who choose their farming places a bit more diligently in the first place.
In my view - high risk with at best medium reward.
"The country's largest salmon producer says it is being forced to close farms and let go of staff due to warmer water temperatures brought on by climate change."
https://www.rnz.co.nz/news/national/...a-temperatures from RNZ.
BE pushed back to September
Quote:
The outcome of New Zealand King Salmon's application to build an open ocean farm in the Cook Strait - called Blue Endeavour - is expected in September.
Another capital raise will be needed if Blue Endeavour is approved.
https://www.stuff.co.nz/business/opi...-know#comments
Of course it will. Blue Endeavour (if approved) will cost lots of money (the company does not have) and is high risk. As far as I know the first open water salmon farming operation in the world ... but hey, what possibly can go wrong - even if we don't consider climate change?
Just wondering whether a handful of one in a century storms per decade and ways increased wave energy might be an issue for an open sea farming operation?
19.5 cents per share ... so, it is official now: NZK turned into one of these penny dreadful stocks with high risks and limited rewards.
Who would have thought that a conservative agricultural stock chaired by the well regarded John Ryder will drop from more than $2 (actually $2.70 in Nov 2018) to below 20 cents today?
Some of the gurus here say the market is always right - but was it really right in November 2018 and is it as well right today?
Just amazing.
chairman confirmed at annual general meeting that will be the case
https://www.nzherald.co.nz/business/...LG653A5CQLV2I/
If you want penny dreadfuls, might I suggest PHL, ACE, or ACF, to name but a few.
As for NZK:
Based on what the market knew in 2018, the market was right in 2018.
Based on what the market knows in 2022, the market is right in 2022.
Based on what the market knows in 2022, the market was wrong in 2018.
In spite of what they say, timing is important!
Excellent? Not really but confirming my point.
Market is as clueless as anybody else in predicting the future in any consistent manner.
If you call this as "market always being right" than I don't know how in your view a wrong decision would look like. Most people are at most times doing their best according to their present knowledge ... and just look at the mess this creates.
Does not mean they are always right.
Todays newspaper yesterday !!
Another day, another takeover speculation squashed.
http://nzx-prod-s7fsd7f98s.s3-websit...541/373738.pdf
New Zealand King Salmon Investments Limited (NZX and ASX: NZK) is aware of speculation published recently in the media.
NZKS confirms that it has not been approached, and is not in discussions with any parties, regarding a potential takeover transaction.
New Zealand King Salmon remains in compliance with its NZX continuous disclosure obligations and will continue to inform the market in accordance with them.
Speculation about a takeover denied by NZK
Maybe speculation fueled by Cooke making an offer for Tassel
Who knows ,,,, but jeez acquiring NZK really on anybody's radar when they could be broke in years time
No price action based on the so-called rumours.
Looks like the share price is getting a boost from this:
"Tasmania-Nelson direct shipping route boost for aquaculture"
https://www.stuff.co.nz/business/far...or-aquaculture
Blue Endeavour result leaking out?
CEO in the above mentioned article does say “Offshore farming offers a route to increase production with two applications currently being assessed,” Rosewarne said. “Our Blue Endeavour plan, when approved, will deliver an additional 10,000 tonnes a year of King salmon. "
Given how careful CEOs are with wording, that when approved, rather than if is a big give away!
Not quite sure whether approval of Blue Endeavor would be good or bad for them. Only would mean that they need to raise more money to build an untested open sea farm ... which - after a long time - may or may not return the capital invested.
Current market cap is $135m. Any idea what it would cost to get Blue Endeavour up and running, allowing for a number of learning cycles? I suppose the dilution at current SP would be substantial.
No idea on cost and if it will work well, but CEO in June said this:
Chief executive Grant Rosewarne said the first possible harvest for Blue Endeavour would be in 2027 but "NZ King Salmon acknowledges that we first need to prove the positive outcomes of our new agriculture model".
"Assuming approval to proceed, before expanding into Blue Endeavour, all options for funding remain on the table," he said.
https://www.newstalkzb.co.nz/news/bu...takeover-talk/
BE decision should come this month. Let's gooooo!
https://media.giphy.com/media/dmcQ75lZdh4Hu/giphy.gif
Surprised this hasn't been mentioned already:
https://www.rnz.co.nz/news/country/4...o-road-closure
Noting Whangamoa road re-opened six days ago now.
Could be another bad year ahead for salmon & mussel farming in NZ :
https://www.nzherald.co.nz/nz/explained-coming-marine-heatwave-may-be-one-of-nzs-worst/EYMYOQR2X2U3HPA3WXFHFC3GDY/"This is something that's been ongoing for more than six months now in Auckland, Coromandel, Bay of Plenty, Waikato, Taranaki, Tasman and off the West Coast of the South Island, as well as in parts of the eastern Tasman Sea."
As of September 13, SSTs in New Zealand's six "climate regions" ranged from 0.6C to 1C above average, relative to the 1991-2020 long-term average.
"If we were to compare that with the same day last year, around the North Island, SSTs are two-tenths to six-tenths of a degree warmer – so it's a pretty concerning picture."
What happens next?
According to the latest guidance, the signal for marine heatwave conditions for the months ahead was even stronger than the state of play last September.
* SST - Soaring Sea Temperatures
This was not good news for both NZK and SAN. Pelorus Sound is looking stuffed in the longer term as there seems no prospect of a reversal to the warming trend. Fishing/Fish Farming is an industry which will bear the brunt of climate change and adaptions will surely be needed. Can NZK move fast enough to survive?
https://www.nzx.com/announcements/399509
New Zealand King Salmon Investments Ltd (NZX & ASX: NZK) reports its financial performance for the six months period ended 31 July 2022 (1HY23). Key points include:
• We reaffirm full year earnings guidance given in April 2022 of an $8m - $12m pro forma EBITDA loss.
• Net loss after tax of $24.5m, following a challenging start to the year with sea farm mortalities, lower harvest and a decline in biomass at sea.
• Revenues are consistent with the prior comparable period (PCP) at ~$80m as a combination of price increases and customer mix have offset reduced sales volumes through 1HY23.
• Sales volumes decreased from 3,669mt in 1HY22 to 2,886mt 1HY23 (a decrease of 21%) consistent with the consequences of a reduced harvest.
• The mortality event in January 2022 continued into 1HY23 and increased mortality cost by $11.9m from $10.4m in 1HY22 to $22.3m.
• Pro-forma EBITDA for 1HY23 was a loss of $13.7m compared to profit of $3.3m for the 1HY22. This is predominately due to the mortality event affecting the first half of FY23, while 1HY22 included $13.5m of early forex close-outs included in other income.
• Finished goods inventories continue to be managed down sensibly following the build-up which occurred through COVID disruptions.
• Post the equity raise in May 2022 net bank (debt)/cash position has improved from a debt position of $44.1m on 31 January 2022 to a net cash position of $15.6m on 31 July 2022. In addition to cash on hand, NZ King Salmon has access to a $6.5m revolving debt facility which remains undrawn.
New Zealand King Salmon Chairman John Ryder said: “As previously indicated we had a disappointing start to the year because of high mortality and the cost of this was $22m for 1HY23. We then had to begin rebuilding our biomass and accordingly we restricted our harvest and sales. We introduced a number of cost-saving initiatives, and our financial performance has improved although there is more work to do. Our recovery progress is in line with previously communicated guidance.”
CEO Grant Rosewarne acknowledged it had been a tough start to the financial year, but the outlook was improving with price increases implemented across all markets. “We introduced our new aquaculture strategy as outlined at full year with three farms in the Pelorus already fallowed. We also made the decision to mothball our Waiau freshwater facility which is surplus to current requirements.”
“We successfully completed a $60.1 million pro rata rights offer and proceeds were used to repay debt which has left us with net cash of $15.6 million. We now have to rebuild biomass from 3,700MT back up to around 5,000MT.
“As outlined previously, we downsized the company, which was necessary to align with the reduced harvest, which was not an easy decision to make. We have been fortunate that there are a number of staff shortages in other businesses, so only 23 positions were made redundant as our business reduced from 580 team members to 452, largely through attrition,” Mr Rosewarne said.
“We sensibly reduced capex and we are forecasting capex spend of $6.5m to $7.5m, compared to $13m last year. Much of the capex relates to pre committed projects, such as a new barge and net cleaner and work on our Blue Endeavour application.”
“Along with introducing price increases across all markets, we have made improvements to our customer and product mix, and we have reduced our promotional budget. There has been a large focus on supply and demand this year following a reduced harvest. Our strong markets remain North America for Ōra King and domestically our Regal brand remains New Zealand’s most preferred smoked salmon,” Mr Rosewarne added.
Recent media articles have indicated the potential for another marine heatwave this summer. The change in our aquaculture model is designed to provide strong mitigation against the effects of warmer temperatures.
“The hearing for our open ocean Blue Endeavour application, 7kms north of Cape Lambert in the Cook Strait, was formally closed at the beginning of September and a decision is now expected by the end of the year. This project is expected to have multiple benefits including increase in scale of operations, reduction in operating costs and improvements in fish health.”
Blue Endeavour would provide an opportunity to recommence farming at three of the fallowed farms in the Pelorus Sound, which will be used as nursery sites for 9 months of the year, avoiding the summer months with fish being transferred to Blue Endeavour at ~1.5kgs for full grow out to ~4.2kgs average weight. This represents an efficient use of assets, capital, and resources.
The application is aligned with the Government’s Aquaculture Strategy which was launched in late 2019 and now has an accelerated objective of the industry achieving $3 billion revenue by 2030. Ends
Had a brief look at and update of this business:
https://recastinvestor.substack.com/...mon-nzknzx-a93
Did it all become a bit too hard for Grant or did Grant become a bit of a problem for the Board
CEO leaves today
http://nzx-prod-s7fsd7f98s.s3-websit...476/382295.pdf
Damn, this isn't good. If they cock up Blue Endeavor it's game over.
I guess he is not best known for his diplomatic communication style with politics, councils and other regional authorities. While I don't know at what stage the recent environmental hearing process is ... I could well imagine that his communication style was not always seen as helpful.
Would NZ King Salmon see a draft decision for their Blue Endeavour application?
Trading halt
Must have finally got that consent