Highlights for 2009
Fish sales volume was up +15.2 per cent and value up +11.5 per cent. Nireus achieved a strong growth in fish sales, both in volume and value, benefiting from the well-positioned geographic distribution of its sales network. In financial year (FY) 2009, fish sales amounted to €118.8 million (up 11.5 per cent) and 27,700 tons (up 15.2 per cent). In the fourth quarter of 2009, the growth in fish sales was 17.9 per cent in value and 13.6 per cent in volume over the same quarter of previous year.
Overall group sales in 2009 amounted to €163.5 million, posting a slight decrease of 3.7 per cent versus the same period last year and to €37.7 million in the fourth quarter (down 1.8 per cent). The decrease in overall sales is attributable mainly to reduced sales of feed and juveniles, a strategy the Group adopted to mitigate the credit risk from the challenging economic environment.
Cost reduction actions delivered savings of €19 million. Nireus achieved significant cost savings by reducing costs and limiting capital expenditures. Total expenses before depreciation were reduced by €11.1 million in 2009 (a decrease of six per cent). Sustainable capital expenditures were reduced to €6.9 million from €14.8 million last year, following the implementation of strict cost control and reduced investments. Due to the long production cycle of farmed fish – lasting 15 to 24 months – there is a significant lag between the implementation of cost containment measures and the onset of tangible results. The Group thus expects a further decrease in overall expenses in the coming year as a result of current actions for the rigorous management of costs and of a better balance between sales and productions as the sector conditions continue to improve.
There was a negative impact on performance from soft pricing and increased production cost due to large fish sizes. Fish prices remained low in 2009 due to the oversupply that occurred in the sector. Additionally, the Group's preference to retain sales during the period of the steep price decline (October 2008-April 2009) increasingly impacted the production cost of goods sold in 2009, resulting in a decline in profits. This impact, however, is not expected to reoccur in 2010. As a result, earnings before interest, tax, depreciation and amortisation (EBITDA) in 2009 amounted to €22.2 million (-26 per cent). Net earnings for the Group declined to -€2.98 million, while net earnings after minority interest were stable at €300,000.
The debt balance was stable. Interest bearing debt (€258 million), of which 68 per cent is long term, remained stable throughout the year. Cash balances amounted to €15.8 million. A major goal for next year is to improve cash flows and equity ratio with a growth in fish sales and rigorous cost management. In February 2010, the number of shares increased by 18.104 shares from the conversion of 8.350 bonds with a total value of €81.580 (from the convertible bond loan issued on July 2007). Share capital consists of 63.628.748 common registered shares of par value €1.34 each, from which 22.390 are treasury shares.
Managing Director's comment
Aristides Belles, Chairman and Maaging Direcot of Nireus, commented:
"In a challenging year, Nireus achieved a strong increase in fish sales, both in volume and value, despite the adversities of the current economic environment.
"Our operational performance in reducing costs, sustaining capex and improving working capital along with the benefit of our international sales network has enabled the Group to overcome the situation that impacted the Mediterranean fish farming sector recently.
"These efforts will continue in 2010 through strict cash control and an additional growth in fish sales. This will provide a lower cost base and contribute to a more extensive customer base that will enable us to capture the growth we expect from the recovery of the fish prices.
"Our priority is to continue to successfully implement our business plan, with foresees a target on cost savings from the merger of units in major production centers and production automation, and an increase in sales from the opening of new markets, in addition to maintaining flexibility with respect to the market trends. The effects of our operational improvements in combination with our focus on opening new markets are strong foundations from which to benefit from the sector recovery and return to our profitability.
"During the first months of 2010, we have noted a significant improvement in fish sales, both in value and volume. We are anticipating the new year with relative optimism, given that the current economic conditions are expected to affect the fish farming sector to a lesser extent as compared to the other sectors."
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