Big rise in losses for troubled Chilean salmon company

The struggling Chilean salmon farmer Nova Austral saw its losses almost treble last year despite an increase in revenues.

The company was only saved from administration In January after creditors agreed to a reconstruction deal.

But its accounts for 2023 show pre-tax losses of just over US $144m (£128m) against $49.9m (£44m) in 2022.

Nova Austral says in its annual report that this situation is a fundamental consequence of the substantial drop in the company’s production levels, due to the revocation of three aquaculture concessions carried out by the environmental authority (SMA) starting in 2022.

These were then reversed in the first instance by the environmental court during the month of January 2024; and the financial costs associated with the issuance of the bond in Norway.

Nova Austral remains reasonably positive. It says in its 2023 annual report that its sales come from a highly diversified client portfolio, where clients are economically and geographically dispersed in countries with low sovereign risk rates (the United States and European Union, mainly).

In addition, credit operations are performed with clients that have a stable commercial relationship with the company and a good payment history, together with a conservative credit policy.

The report adds: “Therefore, the company believes its commercial operations do not expose it to a high risk. Also the history of the company shows no significant bad debts associated with exports or domestic sales. “

“The company has a very conservative customer credit policy, whereby most of sales are made with advances against documents, together with a risk hedge via a credit insurance that includes a great portion of the portfolio, and hence hedging the risk of client insolvency.”