Tassal Group Limited (ASX: TGR) shares are on the rise this morning following the company’s release of its FY21 first-half (1H21) results. At the time of writing, the Tassal share price has jumped 1.51% to $3.37.
The salmon farming company has had a slow start to 2021 with the Tassel share price trading flat for the year to date. Let’s take a look at Tassal’s 6-month update.
What’s driving the Tassal share price?
The Tassal share price is edging higher in morning trade despite the company reporting statutory net profit after tax (NPAT) of $27.6 million for 1H21. This compares to a $40.8 million NPAT reported for 1H20.
According to Tassal’s update, its 1H21 cash flows were materially impacted by lower export market returns for salmon, with the price $2.19kg lower than in 1H20.
The company’s statutory earnings before interest, tax, depreciation and amortisation (EBITDA) was $77.5 million, a 4.3% drop compared to 1H20 EBITDA of $81 million.
However, in positive news, Tassal’s operating EBITDA jumped 18% to $78.4 million, compared to $66.5 million during 1H20.
An FY21 interim dividend of 7 cents per share, unfranked, will be paid on 30 March 2021. This is 22.2% less than the prior corresponding period’s interim dividend of 9 cents.
CEO comments
Commenting on 1H21 activities and what lies ahead, Tassal Managing Director & CEO Mark Ryan said:
Significant uncertainty caused by COVID-19 is expected to continue for the remainder of FY21. Tassal’s strategy of driving increased domestic per capita consumption is well positioned to align consumer needs both during and post-COVID-19.
While Tassal is not immune to global and local forces outside of its control, our key strengths that will assist us [to] mitigate this environment – our diversification strategies across customers and consumers, growing and processing areas, and species and products – combined with our focus on sustainability, position the Company as best it can to navigate the market issues that COVID-19 continues to present.
Foolish takeaway
Over the past 12 months, the Tassal share price has shed more than 23% of its value. Tassal shares fell as low as $2.90 during the March 2020 bear market before rebounding to their current levels. However, the Tassal share price is still trading 28.3% lower than its 52-week high.
Based on the current share price, the company commands a market capitalisation of around $703 million.
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Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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