Cermaq: Solid Result Despite Challenging Market

When entering into fourth quarter, Cermaq has unused long- and short-term financing of close to NOK 4 billion.

Cermaq’s operating revenues were NOK 3 505.6 million (NOK 3 127.6 million) in third quarter 2011 and EBIT pre fair value was NOK 348 million (NOK 432 million adjusted for gain on divestment). The reduction in operating profit is mainly explained by salmon prices being reduced with approximately 30 per cent during third quarter.

CEO Tore Valderhaug said: "I am overall pleased with such a solid result despite a challenging market that demonstrates the strength in Cermaq’s strategy of presence in both feed and farming"

Mainstream’s revenues were NOK 719.3 million (NOK 842.2 million) and volumes sold were 23.3 thousand tonnes (21.4 thousand tonnes). Mainstream achieved an EBIT of NOK 61.2 million (NOK 230.1 million), a decrease of NOK 168.9 million compared to third quarter 2010.

In addition to the sharp drop in average salmon prices, Mainstream’s result was also reduced by one-off cost of NOK 25 million in Finnmark. These costs relate to start-up issues in the upgraded processing plant and write-down of biomass in the ISA site communicated last quarter.

Mainstream Norway reported a negative EBIT pre fair value of NOK 10.0 million (profit of NOK 137.9 million). The EBIT per kilogram for Nordland was a profit of NOK 2.3 (NOK 16.3) and for Finnmark a loss of NOK 25.6 (profit of NOK 8.0). The result in Finnmark is caused by the one-off costs and seasonally low harvest, while Nordland has shown strong operational performance in the quarter.

Mainstream Chile reported an EBIT pre fair value of NOK 64.6 million (NOK 16.0 million). EBIT pre fair value per kilogram, gutted weight, was NOK 7.7 (NOK 4.5). Higher volumes of Atlantic and stronger sales prices for trout and Coho were the main drivers for the improvement.

Mainstream Canada reported an EBIT pre fair value of NOK 6.6 million in the quarter (NOK 76.0 million). EBIT pre fair value per kilogram, gutted weight, was NOK 1.1 (NOK 9.6). Lower prices and volumes explain the reduced profit.

"Although low salmon prices and the challenges in Finnmark have hampered Mainstream’s third quarter result, I appreciate that Mainstream Chile again delivers a very strong result, based on good biological performance and increased volumes for all species," commented Tore Valderhaug.

EWOS’ revenues were NOK 3 226.7 million (NOK 2 627.6 million) with a total volume sold of 371 thousand tonnes (309 thousand tonnes), an increase in volume of 20 per cent. Strong growth in Chile where volumes sold increased by 51 per cent, was a significant contributor to the improvement. EBIT came in very strong at NOK 290.3 million (NOK 238.3 million) due to a combination of volume growth and increased sales of value added products.

"The strong growth in EWOS is a result of a long-term focus on innovation and product development that also going forward is expected to be appreciated by our customers," Mr Valderhaug concluded.

Net interest bearing debt decreased by NOK 28.1 million to NOK 1 186.5 million by the end of third quarter. As of 30 September 2011, Cermaq had available unused committed long- and short-term credit lines, including cash, of NOK 3 897 million.