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Solid Q1 Results for Cermaq, Chile Good Performance

NORWAY and CHILE - Despite low salmon prices Cermaq has reported an EBIT pre fair value of NOK 101 million and a return on capital employed of 16.6 per cent. EWOS increased its volumes by 40 per cent compared with last year, resulting in an EBIT of NOK 62 million. Good performance in Chile was the main contributor to an EBIT pre fair value for Mainstream of NOK 60 million.

Cermaq reported an EBIT pre fair value for first quarter of NOK 101 million (NOK 403 million). The reduction is mainly explained by significantly lower salmon prices compared to last year.

"I am pleased with the solid results Cermaq presents in a challenging market situation, again confirming the strengths of our strategy of operating a global leading feed company combined with a strong and diversified farming business," says CEO Jon Hindar.

Mainstream Chile reported an EBIT pre fair value of NOK 49 million (NOK 160 million). EBIT pre fair value per kilogram, gutted weight, was NOK 3.7 (NOK 11.1). The reduction was due to lower sales prices for all species, particularly for Atlantic salmon. The biological performance is generally good, but with seasonally higher sea lice levels in certain sites.

Mainstream Norway reported an EBIT pre fair value of NOK 12 million (NOK 154 million). EBIT pre fair value per kilogram, gutted weight, was NOK 1.2 (NOK 16.4). The EBIT per kilogram for Nordland and Finnmark was NOK 3.1 (NOK 16.7) and NOK 0.2 (NOK 16.2), respectively. Volumes sold were 10.4 thousand tonnes, 11 per cent above first quarter last year. An average price per kilogram of NOK 25.7 compared to NOK 38.3 last year is the main reason for the reduced results in Mainstream Norway. Higher production cost at some sites in Finnmark and still some additional cost from the upgraded Hammerfest processing plant also impacts the operating results. The processing plants performance is however improving, with expected normalized operation by the end of second quarter 2012.

Mainstream Canada reported a negative EBIT pre fair value of NOK 1.6 million in the quarter (profit of NOK 26.3 million). EBIT pre fair value per kilogram, gutted weight, was negative NOK 0.6 (positive NOK 9.4). The reduction in profit was mainly driven by lower prices in the US market. Good biological performance and certain cost reduction programmes have positively impacted production cost in the quarter.

"We experience overall good operational performance in our farming business even though the lower salmon prices have significant impact on the results. Mainstream has introduced several cost efficiency activities that together with continuous focus on preventive fish health will support solid performance also going forward," states Mr Hindar.

EWOS reported an EBIT pre fair value of NOK 62 million and an EBIT margin of 3.3 per cent in first quarter. EWOS sold 230,000 tonnes of fish feed, an increase of 66,000 tonnes, or 40 per cent, compared to first quarter 2011. The organic growth was 33 per cent. Higher volumes came primarily from a 47 per cent and 30 per cent growth in Norway and Chile respectively.

"EWOS is presenting good results from an exceptionally strong market growth in Norway and Chile," concludes Mr Hindar.

Mainstream expects to harvest 125,000 tonnes of salmonids in 2012 compared to 109,000 tonnes in 2011, an increase of approximately 15 per cent. EWOS expects the market growth in Chile and Norway for 2012 to be above 20 per cent and above 10 per cent respectively.

Lucy Towers

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