Mowi sees profit up in Q2

Strong demand for salmon gave Mowi’s operating profits a boost during the second quarter of this year, with its Scottish division performing particularly well.

The world’s largest salmon farmer today reported a global Q2 operational EBIT or profit of €137m, against €99m for the corresponding period last year. Revenues increased from €911m to €1,000m.

The company said: “Strong demand for salmon drove prices higher in all markets in the quarter and resulted in better earnings for Mowi. Spot prices soared by 18% in Europe and close to 50% in the Americas.

“Generally less restrictive Covid-19 measures have sparked foodservice demand whilst retail demand holds up at a high level.”

Commenting on results, CEO Ivan Vindheim said: “Demand for salmon has strengthened as Covid-19 measures have become less restrictive in most countries.

“The demand response was impressive during the quarter with approximately 25% higher global salmon prices year-on-year despite a relatively high global supply growth of 9% including frozen inventory release from Chile.

“Profits in Mowi Farming improved on the back of higher prices and stable harvest volumes and cost. Mowi Consumer Products had yet another a good quarter with record-high volumes for a second quarter.

Mowi Scotland saw its operational profit double from €14.3m to €29.9m on the back of a much higher harvest, which rose by almost 4,600 tonnes to 19,162 tonnes, thanks to improved biology and average harvest weights.

The contract share at 51% was slightly down on last year (57%) but was positive, said the company.

Mowi said there continues to be a notable reduction in PD (pancreas disease) cases within Mowi Scotland and pasteurella skyensis detections have been absent throughout the first half of 2021 following the introduction of a vaccine in 2020.

“However,” the report said, “CMS (cardiomyopathy syndrome) remains at a relatively high rate of detection. Sea lice levels in the second quarter were normal at most locations and additional control methods have materialised in the form of a second freshwater treatment vessel and high availability of cleaner fish from the breeding programme in Anglesey, North Wales.

“The transition to larger and fewer pen units in Scotland is proceeding as planned and 160m pens are now operational in Loch Seaforth, Western Isles.”

In Norway Mowi has decided to split up its largest farming unit, Norway Region Mid, into two new regions which will be called West and Mid.

“Fish farming is still very much about the details and craftsmanship which call for a great deal of hands-on management particularly in the more biologically challenging areas. This reorganisation will enable us to improve our operational performance, including productivity and cost, in this important farming area for Mowi,” Vindheim said.

The group said it had entered into a new 5-year green €1.8 billion facility with its bank consortium in the quarter at very attractive terms.

Vindheim added: “Sustainability is deeply engrained in the Mowi culture and I am very pleased that we have reached 85% green and sustainable financing with this facility.”

Several MOWI branding launches were undertaken during the quarter including MOWI Pure in Belgium, MOWI Gourmet and Signature in Italy and MOWI Sushi in Spain.

“We continue our long-term quest to de-commoditise the salmon category through our MOWI branding strategy, and it is exciting to see how well our branded products are being received by consumers throughout Europe, Americas and Asia,” he added.

Mowi plans to pay a quarterly dividend of NOK 1.96 per share.