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.
