Marine Harvest unveils £44.5m cost cuts

MARINE Harvest has announced a cost cutting programme totalling 50 million euros (£44.5 million) despite reporting strong fourth quarter earnings and the best annual profits yet for the group.
The world’s largest fish farmer achieved an operation EBIT (pre-tax profit) of €181 million for the fourth quarter of 2017, slightly higher than the figure reported last month.
But for 2017 as a whole the operational EBIT was €792 million, a record high. Turnover for the year totalled €3,654 million, another record.
The fourth quarter turnover or operational revenue was €1,010 million (€1,018 million in Q4 2016).
The total fourth quarter harvest volume was 112,628 tonnes (99,634 tonnes in 2016). The harvest guidance for 2018 is 410,000 tonnes.
Supported by the results and a solid financial position, the board has agreed to pay a quarterly dividend of NOK 2.60 per share, slightly less than had been forecast by some financial analysts.
The dividend will be distributed as ordinary dividend, and not as repayment of paid-in capital.
CEO Alf-Helge Aarskog (pictured) said: ‘Global harvest growth in the industry put pressure on the salmon prices in all markets in the quarter.
‘It is encouraging to see that the supply is growing, but the market needs time to adapt to the recovery after the significant global supply contraction in 2016.’
Then he added: ‘2017 was a great year for Marine Harvest financially, and I am proud of the work all Marine Harvest staff have put in to accomplish this.
‘However, I am concerned about the rising cost and the challenging biology. Hence, we have initiated a global cost savings programme with a target of €50 million savings. The savings are expected to be realised in all parts of the organization.’
Salmon of Norwegian origin achieved an operational EBIT per kilo of  €1.77 (2.70) in the fourth quarter, while salmon of Scottish and Canadian origin reported operational EBIT per kilo of €1.19 and  €0.98 respectively (€1.83 and €3.33).
Salmon of Chilean origin reported operational EBIT per kilo of €1.03 in the quarter (€2.61).
The figures include contribution from Sales and Marketing, including MH Consumer Products, which reported an operational EBIT of €25.9 million (€23.6 million).
MH Feed reported an operational EBIT of €2.8 million ( €10.8 million).