Ann: Tassal 2021 AGM Presentation, page-5

There's no new information in this, beyond what is on slide 26. This however highlights the export opportunities they have been able to garner in July, August and September.

Considering they produced around 10,000t in the quarter (slightly less than 10,250t run rate for 41,000t on the year, which is because of seasonality), they have thus reduced their inventories by around 1,500t as they note in the highlighted dot point below. The starting inventory was around 7,000t, which would now be down to 5,500t and a target of 2,000t by the end of FY22. I would suspect that is slightly below their interim target, because they would have preferred to take advantage of the export opportunities. Regardless, this export opportunity will continue til the end of FY22 as per fishpool forward prices (65NOK in Q2CY22). With air freight also hopefully coming down as routes open up, there may also be more capacity.

So from my estimates, the normal runrate per quarter for domestic sales is 7,250t, factoring in the lockdowns impact on restaurants etc. So if they have done 11,500t of total salmon sales, then I suspect around 4,250t of exports have been achieved during the period. That's a bit higher than normal and will be good for free cash flow, but my initial target for the year of 13,500t of exports still seems about right (about 5,000t more than FY21). They note that pricing returns are up 20% for exports - that means the export price they are receiving is around $12/KG, up from $9.95/KG in FY21 but short of the $14+KG the China FOB prices are reporting. I have previously estimated EBITDA/KG increasing from $1.17/KG in FY21 to $2.40/KG in FY22, and reckon that's still in the ballpark with these prices. Maybe some upside from there, but they also noted below the domestic wholesale volume is being impacted, so probably cancels each other out.

One other thing to note is that they have increased their maintenance CAPEX for salmon to $50m p/a. This was part of a short thesis. I can't recall what the prawn maintenance CAPEX is - it's pretty low and has largely been put into prawn growth CAPEX at this point which is reducing to $20m in FY22. I have estimated a worst-case situation of $90m maintenance and growth CAPEX for FY22, and this seems to be conservative but about right. FCF should be a bumper if these results hold.