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Marine Harvest Results Marked by Weak Prices in Q3

26 October 2012, at 1:00am

NORWAY - Marine Harvest Group achieved an operational EBIT of NOK 73 million in the third quarter of 2012, compared with NOK 457 million in the same quarter of 2011. The result was characterised by weak market prices and less favorable prices for sales contracts compared with previous quarters. The operating cash flow for the quarter was NOK 237 million (NOK 269 million in Q3 2011).

"The results for the third quarter were negatively impacted by weak market coupled with less favorable sales contracts compared with previous quarters. I rejoice in the organisation's ability to deliver on costs, especially in Norway. We struggle in Chile and Canada due to the unusually low prices prevailing in America. We continue to benefit from measures to improve cash flow, which was implemented in 2011, and the balance is due to this very rugged," said CEO of Marine Harvest ASA, Alf-Helge Aarskog.

Marine Harvest reported operating revenues and other income of NOK 3,647 million (NOK 3,636 million) in the third quarter of 2012. Harvest volumes increased by 12 per cent to 93,229 tonnes from 83,076 tonnes in the third quarter of 2011.

Marine Harvest Norway achieved an operational EBIT per kg of NOK 2.47 (6.39) in the third quarter, while Marine Harvest Scotland and Marine Harvest Canada achieved an operational EBIT per kg of NOK 2.21 and NOK -5.95 ( 10.42 and -7.97). Marine Harvest Chile achieved an operational EBIT per kg of NOK -2.54 (6.02). These figures include contributions from Sales and Marketing, including VAP Europe.

Marine Harvest VAP Europe reported a break-even result compared with NOK 35 million in Q3 2011. Marine Harvest expects to harvest a volume of 390,000 tonnes in 2012, of which 101,000 tonnes are expected to be harvested in the fourth quarter.

Cash flow from operations was NOK 237 million (NOK 269 million) in the third quarter of 2012 after the release of NOK 37 million (NOK -302 000 000) in working capital. Net financial items were probably -100 000 000 (NOK -28 million). Net financing costs include interest expenses of NOK -92,000,000 (NOK -105 million). Net interest-bearing debt at the end of the third quarter, probably 5005 million compared with NOK 6,142 million for Q3 2011 and probably 5177 million by the end of Q2 2012.

The equity ratio was 49.1 per cent at the end of the quarter (50.8 per cent at the end of the second quarter). Annualized ROACE for the quarter was 2.2 per cent and NIBD / equity ratio was 46.7 per cent at the end of the quarter.

"We have decided to invest in a 220,000 tonne feed plant in Norway. This is a significant step in the development of Marine Harvest to become an integrated protein company. We expect an attractive return on this investment and it will help to stabilise the Group's earnings. This is a natural part of the value chain as feed accounts for about half of our costs. The investment will also help to balance the unfavorable situation we have with few feed suppliers operating at full capacity," said Mr Aarskog.

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