Volumes down, costs up in MH Scotland

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MARINE Harvest today announced a strong performance for the second quarter of this year, with an operating profit or EBIT (earnings before interest and tax) of €175 million.
But there was a ‘significant decrease’ in harvest volumes in Scotland and biological costs were up 33 per cent compared to the same period last year.
The overall results for the group are in line with forecasts and compare with an EBIT of €198 million for the corresponding period last year, when salmon prices were higher.
The company said this year’s second quarter figures were supported by good results, a strong market outlook, and a solid financial position. As a result the board has proposed a quarterly dividend of NOK 2.60 per share.
However, harvest volumes were lower than the corresponding period last year, at 78,346 tonnes in the quarter (78,612 tonnes in 2017).
And harvest guidance for 2017 has been reduced from 400,000 to 380,000 tonnes, including Northern Harvest, because of biological issues in Norway, Scotland and Canada.
[Scotland]
In Scotland, harvest volumes declined from 18,515 tonnes gutted weight in Q2 2017 to 8,958 tonnes in Q2 2018. This was due to lower opening biomass as a consequence of timing of smolt stockings and lower performance on the fish harvested in 2018.
The decline was slightly more than expected but, in tonnage terms, Scottish harvest volumes developed more or less as expected.
The effects of higher achieved prices and increased margin from Consumer Products on salmon of Scottish origin were more than offset by lower harvest volume and cost increases.
Cost per kg was reduced in the second quarter compared to the first quarter; however, compared to the second quarter in 2017 costs increased.
Biological costs per kg in Scotland increased by 33 per cent in the second quarter of 2018 compared to the corresponding quarter of 2017, mainly due to increased feed and health costs and negative scale effects.
No incident based mortality was recognised in the second quarter and sea lice levels at the end of the quarter were lower than at the end of the comparable quarter of 2017.
Production has been lower than in the second quarter of 2017 as a result of lower opening biomass.
Volumes from the Faroe Islands declined by 28 per cent in the quarter compared to the same quarter in 2017.
Supply from Norway increased by eight per cent compared to the second quarter of 2017. Volumes from Chile increased by 19 per cent compared to the second quarter of 2017. The increase was more than expected and driven by both a larger number of fish harvested and higher average weights.
Salmon of Norwegian origin achieved an operational EBIT per kilo of €2.56 (€2.50 in 2017) in the second quarter, while salmon of Scottish and Canadian origin reported operational EBIT per kilo of €2.38 and €0.98 respectively (€3.10 and €2.34).
Salmon of Chilean origin reported operational EBIT per kilo of €1.86 in the quarter (€1.46).
Marine Harvest Feed reported an operational EBIT of €0.7 million (€1.8 million). And Marine Harvest Consumer Products reported an operational EBIT of €13.1 million (€19 million).
CEO Alf-Helge Aarskog, said: ‘The global demand for salmon has been very good so far this year. This has led to high prices in all markets in the second quarter.
‘The result has also been impacted by strong performances by our business units in Norway and Chile, which both had their best second quarter ever.’
The Marine Harvest Group reported operational revenues of €888 million, slightly up on the 2017 figure of €884 million.
After being given the approval by Canada\’s Competition Bureau to buy Northern Harvest in June, Marine Harvest said it completed the transaction in July.
‘Marine Harvest has, through this acquisition, expanded its global footprint to include Atlantic Canada. Northern Harvest will be consolidated from the third quarter,’ the company added.
Aarskog said: ‘This is an important investment for Marine Harvest and shows that we are committed to growing the industry in Canada.
‘We believe the prospect for salmon farming in Atlantic Canada is great. Although this is a new area for us, we are working in close cooperation with authorities, local communities and other industry players to realise success.’
Picture: Marine Harvest CEO Alf-Helge Aarskog

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