Stronger salmon prices lift earnings in Cermaq –

Stronger salmon prices lift earnings in Cermaq Published:  23 April, 2013

Cermaq has reported an EBIT, pre fair value and non-recurring items for the first quarter, of NOK 94 million compared to NOK 11 million in the fourth quarter of 2012 and NOK 101 million in the first quarter of 2012.

The improvement versus the last quarter of 2012 was driven by a tighter salmon market and stronger prices. EBIT pre fair value and including non-recurring items was NOK 141 million.

“The results in the first quarter were satisfactory. Mainstream turned a significant loss in fourth quarter 2012 into a good profit in the first quarter this year due to strong salmon prices in Norway. The prices achieved by our operations in Canada and Chile have also improved significantly during the quarter after having lagged behind the European prices in late 2012,” said CEO Jon Hindar.

“EWOS produced a satisfactory result in a market which globally dropped by 11 percent in volume compared to the first quarter of 2012 due to lower than normal sea temperatures in Norway. The first quarter is normally the slowest for EWOS,” continues Jon Hindar.

Cermaq’s operating revenues were NOK 2 860 million (NOK 2 328 million) in the first quarter of 2013. Revenues in EWOS increased by 8 percent to NOK 2 010 million as higher raw material cost lifted average selling prices. Mainstream’s revenues were NOK 1 238 million, an increase of 64 percent.

EWOS sold 213 thousand tonnes of fish feed in the first quarter of 2013, a decrease of 7 percent compared to the first quarter of 2012. Volume in Norway dropped 11 percent, while the volume in Chile was 3 percent lower. EBIT pre fair value was NOK 39 million (NOK 62 million), mainly due to lower production volume.

Mainstream reported an EBIT pre fair value and non-recurring items of NOK 49 million (NOK 60 million) in the quarter. Volumes sold were 43.1 thousand tonnes (26.2 thousand tonnes), an increase of 65 percent. The EBIT pre fair value per kilogram, gutted weight, was NOK 1.1 (NOK 2.3). A processing facility in Calbuco in Chile was sold as part of realising the synergies following the acquisition of Cultivos Marinos Chiloé in 2012. The gain of NOK 46 million is classified as a non-recurring item and not included in Mainstream’s operating result.

EBIT pre fair value and non-recurring items per kilogram, gutted weight, for Mainstream Chile was negative NOK 2.0 (positive NOK 3.7), for Mainstream Canada NOK 3.2 (negative NOK 0.6) and for Mainstream Norway NOK 5.8 (NOK 1.2).

“While the price development in the Americas has been a positive factor during the quarter, the biological environment in Chile continues to be challenging, in particular relating to sea lice levels and SRS. The situation is manageable, but Mainstream is following the situation closely, and is working with both the industry and the regulators to improve the situation,” said Jon Hindar.

Mainstream expects sales volume for 2013 of 148 thousand tonnes, 23 percent up from 2012, due to growth in Mainstream Chile. Limited supply growth in combination with robust demand should continue to support a strong salmon market. The feed market expects to be fairly stable during the rest of the year.

On 5 April 2013, Cermaq announced several transactions relating to the acquisition of shares in Copeinca and a voluntary offer for the remaining shares in the company. The activities previously announced continue as planned with an expected approval of the rights issue to finance the transactions at the annual general meeting in Cermaq 21 May 2013.