Aquaculture for all

Strong Profitability For MH, As Harvest Increases


NORWAY - Profitability for Marine Harvest increased substantially in the first quarter of 2011, as harvest volumes are expected to increase by 15 per cent in 2011.

The Marine Harvest Group achieved an operational EBIT of NOK 1 062 million in the fourth quarter of 2010, compared to NOK 520 million in the corresponding quarter of 2009.

"We are satisfied with the good result and the improvements made in the quarter. Overall performance is good, specifically in Norway. The farming operations in Canada are still struggling with biological challenges. Our operations in VAP Europe are gradually adapting to higher raw material prices, and Marine Harvest Chile is now profitably adapted to the biological situation in Chile. We are very well positioned to benefit from the expected strong market in 2011 and 2012, "comments CEO of Marine Harvest ASA, Alf-Helge Aarskog.

The operational EBIT margin increased from 13.7 per cent to 23.1 per cent. Earnings per share improved from NOK 0.15 to NOK 0.30. Higher market prices and better relative price achievement are the main drivers behind the improved profitability. Based on good performance, strong volume increase and expected cash flow in 2011, the Board will propose a dividend of NOK 0.60 per share to the Annual General Meeting to be held in May. The Board expects to announce a second dividend this year in connection with the presentation of the second quarter results.

Marine Harvest reported operating revenues of NOK 4 588 million (NOK 3 805 million) in the fourth quarter of 2010. Harvest volumes were 90 485 tons compared to 87 409 tons in the fourth quarter of 2009. Net earnings in the period were NOK 1 092 million (NOK 520 million).

Cash flow from operations amounted to NOK 305 million (NOK 102 million) in the fourth quarter of 2010. Net financial items amounted to NOK -103 million (NOK 51 million). Net financial items include net interest expenses of NOK 96 million (NOK 73 million). Net interest-bearing debt increased to NOK 5 218 million (5 152 at end of the third quarter), mainly due to the distribution of a dividend of NOK 0.05 per share in December.

The equity ratio increased to 53.8 per cent at the end of the quarter (52.8 per cent at end of the third quarter). Annualized ROACE was 26.2 per cent (13.6 per cent) and NIBD/Equity was 41.4 per cent, compared to 44.3 per cent at the end of the third quarter.

Marine Harvest Norway achieved an operational EBIT per kg of NOK 13.08 (4.40) in the fourth quarter, while Marine Harvest Canada and Marine Harvest Scotland reported operational EBIT per kg of NOK 3.96 and NOK 8.99 respectively (2.51 and 5.09). Marine Harvest VAP Europe reported an operational EBIT margin of 2.5 per cent (10.9 per cent) in the fourth quarter of 2010. Marine Harvest Chile achieved an operational EBIT of NOK 88 million (NOK 70 million).

Marine Harvest expects to harvest a volume of 340 000 tonnes in 2010, of which 73 000 tonnes is expected to be harvested in the first quarter.

"We will increase harvest volumes by approximately 15 per cent in 2011. The market outlook remains very strong and we now have a higher contract share for 2011, than at the same time last year, at prices higher than achieved prices in the second part of 2010. The establishment of the new Business Unit Global Sales and Marketing should gradually improve our value creation and price achievement. In Chile, we have succeeded in adapting our operations to the current low activity level, with a healthy profit. All in all, Marine Harvest is very well positioned to benefit from a strong seafood market in 2011 and 2012," says Alf-Helge Aarskog.