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Marine Harvest Reports Strong Results For Q2

NORWAY - The Marine Harvest Group achieved an operational EBIT of NOK 894 million in the second quarter of 2011, compared to NOK 792 million in the corresponding quarter of 2010. Higher achieved prices and higher harvest volumes were the main drivers behind the improved results. Marine Harvest has a strong contract portfolio for the second half of 2011.

Marine Harvest reported operational revenues and other income of NOK 4,192 million (NOK 3,583 million) in the second quarter of 2011. Harvest volumes were 79,932 tons compared to 68,102 tons in the second quarter of 2010. Net earnings in the period were NOK 685 million (NOK 741 million).

During the last part of the second quarter Marine Harvest experienced a sudden and significant increase in supply, leading to a significant decrease in spot prices. Despite this supply shock, Marine Harvest was able to improve average achieved prices in the quarter.

Overall operational performance in the group was satisfactory, with record results in Scotland.

Cash flow from operations amounted to NOK 1,581 million (NOK 890 million) in the second quarter of 2011. Net financial items amounted to NOK 400 million (NOK -34 million). Net financial items include interest expenses of NOK 98 million (NOK 105 million), and a positive change in the fair value of the conversion option of the convertible bond of NOK 396. Net interest-bearing debt increased to NOK 5,799 million (4,678 at end of the first quarter), after a dividend distribution of NOK 2,865 million.

The equity ratio decreased to 47.3 per cent at the end of the quarter (55.7 per cent at end of the first quarter).

Annualised ROACE was 25.8 per cent (20.8 per cent) and NIBD/Equity was 55.9 per cent, compared to 36.6 per cent at the end of the first quarter.

After changing the organisational structure, Marine Harvest now reports operational EBIT per kilo including contribution from the new Sales and Marketing unit. Comparable numbers for the second quarter of 2010 have been estimated.

In Norway, Marine Harvest achieved an operational EBIT per kilo of NOK 13.08 (11.58) in the second quarter, while in Scotland and Canada reported operational EBIT per kilo was NOK 13.94 and NOK 4.95 respectively (9.43 and 11.67). Marine Harvest VAP Europe reported an operational EBIT margin of 0.1 per cent (5.6 per cent) in the second quarter of 2011. In Chile we achieved an operational EBIT of NOK -28 million (NOK two million).

Marine Harvest expects to harvest a volume of 335,000 tonnes in 2011, of which 79,000 tonnes is expected to be harvested in the third quarter.

Marine Harvest Cheif Executive, Alf- Helge Aarskog, said: "We are concerned about the market balance the coming quarters and will review our production plans and step up marketing activities."

"Our new Business Area, Sales and Marketing, is now in operation, and will be measured on its ability to improve our price achievement and develop the markets for our products."

"Global supply in the second quarter was at the same level as in the second quarter of 2008, but at a significantly higher price level. The underlying demand growth which has materialised into higher prices the last years must now be utilised to increase volumes at a different price level."

"In the second half of 2011 we have a strong contract portfolio entered into at prices reflecting the average achieved price level in the second quarter," Mr Aarskog concluded.

the Fish Site Editor

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