Fish farmer New Zealand King Salmon has sharply pared back its earnings forecast for the January 2022 year because of higher-than-expected mortality rates arising from warm sea temperatures, notably in Pelorus Sound. 

NZX-listed NZ King Salmon said the unforeseen increase in mortalities would affect its full-year result for 2022 and 2023. 

The company has cut its 2022 earnings guidance of earnings before interest, tax depreciation and amortisation (EBITDA) to $6.5m–$7.5m from a previous forecast of $10.5m to $12.5m. 

"Climate change and warming sea temperatures have been identified as key environmental, social and governance risks for the business and NZ King Salmon has put measures in place to mitigate these risks, including the adjustments to our farming model, and our application for our Blue Endeavour open ocean farm this year has proven to be particularly challenging," the company said. 

"It is not uncommon to see an increase in mortality over summer particularly on our westerly Pelorus farms and this is one of the main reasons we have applied for Blue Endeavour in the cooler, deeper and faster current conditions of the Cook Strait," it said. 

The resource consent hearing was completed in December and a decision is expected in the next few months. 

By mid-afternoon, NZ King Salmon's share price was down 20c or 16.5 per cent at $1.01. 

Last September, NZ King Salmon said its net loss came to $5.6m in the six months to July, driven by small fish. 

The shortfall equalled the previous first half's loss. 

NZ King Salmon is the world's largest aquaculture producer of premium king salmon. 

- by Jamie Gray, NZ Herald