Cermaq See Hope: Heavy Losses, Algal Blooms, ISA

Farming in Canada shows very good profitability, say Cermaq. However, Norway and Scotland are not satisfactory due to disease issues in the Finnmark-region in Norway and in the Shetlands. The feed business experienced improved margins, and the Cermaq believe that the overall feed result is satisfactory considering the challenges in Chile.

Cermaq’s operating revenues were NOK 2 427.2 million in the quarter (NOK 1 768.3 million). The increase in revenues is mainly due to higher volumes and sales prices in Mainstream and the consolidation of Denofa.

"Despite the heavy losses in Chile I believe the results are positive in the sense that the balance sheet is significantly improved, our equity ratio is increasing and we have activities in place in Chile to address the severe situation which will continue beyond 2009," says CEO Geir Isaksen.

The Mainstream group reported a first quarter EBIT pre fair value loss of NOK 89.3 million compared to a loss of NOK 15.9 million in Q1 2008. The result was heavily impacted by ISA cost in Chile including exceptional costs of NOK 84 million related to ISA and costs of 20.2 million related to algae bloom.

Volumes increased by 31.1 percent due to higher sales volumes in Chile and in Canada. Canada improved significantly from quarter 1 2008, not only from higher volumes but also from the favorable prices in the US market.

Norway experienced reduced volumes and results, mainly due to PD-problems in Finnmark, whereas Nordland reported strong results. In the second quarter all harvest in Norway will come from Nordland. Mainstream Scotland reported an EBIT pre fair value loss of NOK 12.1 million in the quarter, including NOK 4.7 million of exceptional costs from sanitary problems at Shetland.

Overall global supply is expected to drop by more than 6 per cent in 2009, and thus market prices are expected to remain strong.