New Zealand King Salmon (NZK.NZX) has been battling its way upstream (pun intended) for quite some time.
It’s been faced with rising freight costs as a result of Covid and changing sea temperatures in its salmon rearing waters.
The following is a Basic Recast Analysis of its last set of accounts, The Consolidated Financial Accounts For The 6 Months Ended 31 July, 2021.
Original Revenue Statement
Recast Revenue Statement
Comments
EBIT was a massive -$37.0 million in the current financial period. Unrealised gains in biological assets are $30.7 million in the current period. The conservative approach is best. Total earnings were similar in both periods at around -$5.6 million.
Original Balance Sheet
Recast Balance Sheet
Comments
The company has a strong balance sheet with high equity although it has declined at the current period balance date.
Original Movements In Equity
Recast Movements In Equity
Comments
Shareholders' funds declined in the current period due mainly to the loss and also the negative unrealised movement in the cash hedge reserve.
In the prior period shareholder funds increased despite the loss mainly because of a $12.8 increase in the cash hedge reserve.
Original Cash Flow Statement
Recast Cash Flow Statement
Comments
Operating cash flow in the current period would have been strongly negative but the early closure of a forward contract produced a $13.5 million cash injection.
Ratio Analysis
Comments
The company has a very strong equity ratio of 66.3%. The net tangible assets (NTA) in the current period at $1.65 is well above its current share price of $1.03 at the time of writing.
Summary
This company does not make money for its shareholders. It has relied on early termination of derivative contract(s) to produce positive operating cash flow in the current period.
The net profits after tax which include the unrealised gains on biological assets are still negative. With the gains on biological assets placed further down the revenue statement because of their lower (unrealised) quality the company has massive negative EBITs.
The full year accounts are due out shortly and it will be interesting to see how the company is progressing. An update will be posted here once the full year accounts are sighted.
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Basic Analysis: New Zealand King Salmon (NZK.NZX)
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Interim Accounts to 31.7.21
Photo by Marcos Paulo Prado on Unsplash
Source: Direct Broking
New Zealand King Salmon (NZK.NZX) has been battling its way upstream (pun intended) for quite some time.
It’s been faced with rising freight costs as a result of Covid and changing sea temperatures in its salmon rearing waters.
The following is a Basic Recast Analysis of its last set of accounts, The Consolidated Financial Accounts For The 6 Months Ended 31 July, 2021.
Original Revenue Statement
Recast Revenue Statement
Comments
EBIT was a massive -$37.0 million in the current financial period. Unrealised gains in biological assets are $30.7 million in the current period. The conservative approach is best. Total earnings were similar in both periods at around -$5.6 million.
Original Balance Sheet
Recast Balance Sheet
Comments
The company has a strong balance sheet with high equity although it has declined at the current period balance date.
Original Movements In Equity
Recast Movements In Equity
Comments
Shareholders' funds declined in the current period due mainly to the loss and also the negative unrealised movement in the cash hedge reserve.
In the prior period shareholder funds increased despite the loss mainly because of a $12.8 increase in the cash hedge reserve.
Original Cash Flow Statement
Recast Cash Flow Statement
Comments
Operating cash flow in the current period would have been strongly negative but the early closure of a forward contract produced a $13.5 million cash injection.
Ratio Analysis
Comments
The company has a very strong equity ratio of 66.3%. The net tangible assets (NTA) in the current period at $1.65 is well above its current share price of $1.03 at the time of writing.
Summary
This company does not make money for its shareholders. It has relied on early termination of derivative contract(s) to produce positive operating cash flow in the current period.
The net profits after tax which include the unrealised gains on biological assets are still negative. With the gains on biological assets placed further down the revenue statement because of their lower (unrealised) quality the company has massive negative EBITs.
The full year accounts are due out shortly and it will be interesting to see how the company is progressing. An update will be posted here once the full year accounts are sighted.