Aquaculture for all

EWOS & Mainstream Boost Cermaq Results

Economics +1 more

NORWAY - Cermaq reported an EBIT pre fair value for the second quarter of NOK 318 million, an improvement of NOK 103 million from second quarter 2010. The strong improvement for both business units is driven by improved results in Chile, increased share of value added products in EWOS and excellent performance in Mainstream Canada.

The operating revenues of the group were NOK 2,558,1 million (NOK 2,002,9 million) in the quarter.

EBIT pre fair value was NOK 317,7 million (NOK 215,1 million), and net profit was NOK 175,3 million (NOK 363,6 million). The reduced net profit is due to negative fair value adjustments on biological assets this quarter from reduced salmon prices at the end of second quarter.

This quarter we are particularly pleased with the strong performance in EWOS from a solid volume growth as well as the results of the feed business unit’s focus on research based product development, CEO Geir Isaksen comments.

Mainstream revenues were NOK 715,5 million (NOK 665,4 million), and volumes sold were 17.5 thousand tonnes (16.6 thousand tonnes). Mainstream achieved an EBIT of NOK 213,4 million (NOK 174,2 million), an improvement of NOK 39,2 million compared to second quarter 2010.

Better operating result within farming is primarily driven by higher volumes and improved cost in Canada.

Mainstream Chile sold 4.1 thousand tonnes in second quarter, mainly Atlantic salmon. Approximately 50 per cent was sold to Brazil, taking advantage of better prices compared to other markets. EBIT pre fair value per kilogram was NOK 8.0 (NOK 0.2). The biological performance in Chile is generally good.

In Mainstream Norway EBIT per kilogram for Nordland and Finnmark were NOK 11.7 (NOK 16.1) and NOK 14.1 (NOK 16.7) respectively. Achieved average price per kilogram was NOK 36.6, down NOK 2.5 from the same period last year.

Fixed price contracts represented 25 per cent of sales in the period and were concluded at NOK 0.9 per kilogram lower than the average spot price. The expansion of the processing plant in Finnmark will be ready early August. Also the farming investments to facilitate an increased harvest in 2013 are developing as planned.

Mainstream Canada reported a harvest of 6.3 thousand tonnes in the quarter, 50 per cent or 2.1 thousand tonnes higher than the same quarter 2010. EBIT pre fair value per kilogram was NOK 14.8 (NOK 14.2).

Our operation in Mainstream Canada has this quarter delivered very strong results, Geir Isaksen states. This is a combination of higher volumes and good biological performance for the harvested sites.

EWOS reported revenues of NOK 2,117,5 million (NOK 1,514,7 million) with a total volume sold of 245 thousand tonnes (183 thousand tonnes), an increase of 34 per cent compared to same quarter last year.

Adjusted for the acquisition in Viet Nam, organic growth in second quarter was 28 per cent. Higher volumes came primarily from strong growth in Chile where EWOS’ volumes increased by 78 per cent. EBIT in EWOS increased to NOK 127,6 million (NOK 59.4 million). The new products introduced by EWOS during second quarter 2011 have been positively received in the market and contributes to improve the value added share of total volume and results in EWOS.

EWOS is less impacted than farming companies by the decrease in the salmon prices. With its strong research based product portfolio we expect that customers also in a market with lower prices will see the benefit of using functional feed that have good impact on fish health and growth, Geir Isaksen comments.

Cermaq reported a negative cash flow from operating activities of NOK 97.2 million in second quarter 2011 (negative NOK 11.9 million). The reduction is mainly due to strong sales growth and a corresponding growth in receivables in EWOS, and increased payment of income taxes. Net interest bearing debt in the quarter increased by NOK 761 million to NOK 1,214,6 million also due to the dividend payment of NOK 499,5 million distributed in the second quarter.

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