Strong Results For MH, But Room For Improvement

First Quarter Results

The Marine Harvest Group achieved an operational EBIT of NOK 963 million in the first quarter of 2011, compared to NOK 608 million in the corresponding quarter of 2010.

The operational EBIT margin increased from 17.6 per cent to 24.4 per cent. Higher market prices were the main driver behind the improved profitability. Contract prices and future prices confirm a strong market balance for the rest of 2011.

Marine Harvest reported operating revenues of NOK 3,942 million (NOK 3,454 million) in the first quarter of 2011. Harvest volumes were 76,088 tons compared to 73,090 tons in the first quarter of 2010. Net earnings in the period were NOK 606 million (NOK 626 million).

Continued strong global demand for salmon resulted in high prices and record results for our two largest farming units, Marine Harvest Norway and Marine Harvest Scotland.

“I am not satisfied with our achieved prices in Norway and the margins in Marine Harvest Canada and Marine Harvest VAP Europe. The establishment of a new global sales and marketing organisation should improve our overall price achievement and an on-going operational review will address the challenges we have in Canada”, comments Alf-Helge Aarskog , CEO of Marine Harvest ASA,.

Cash flow from operations amounted to NOK 1,036 million (NOK 805 million) in the first quarter of 2011. Net financial items amounted to NOK -162 million (NOK 32 million). Net financial items include net interest expenses of NOK 95 million (NOK 77 million). Net interest-bearing debt decreased to NOK 4,655 million (5218 at end of the fourth quarter).

The equity ratio increased to 55.9 per cent at the end of the quarter (53.4 per cent at end of the fourth quarter). Annualized ROACE was 21.7 per cent (15.2 per cent) and NIBD/Equity was 35.8 per cent, compared to 41.5 per cent at the end of the fourth quarter.

Marine Harvest Norway achieved an operational EBIT per kilo of NOK 13.42 (8.59) in the first quarter, while Marine Harvest Canada and Marine Harvest Scotland reported operational EBIT per kilo of NOK 8.78 and NOK 12.87 respectively (8.34 and 6.21). Marine Harvest VAP Europe reported an operational EBIT margin of 0.60 per cent (4.4 per cent) in the first quarter of 2011.

The situation in Chile

Marine Harvest Chile achieved an operational EBIT of NOK 46 million (NOK -10 million).

Marine Harvest expects to harvest a volume of 341,000 tonnes in 2011, of which 81,500 tonnes is expected to be harvested in the second quarter.

“We are on track to increase harvest volumes by approximately 15 per cent in 2011 and also on our programme to reduce costs in Norway. Current market prices, our contract portfolio and observed future prices all confirm a strong market balance for the rest of 2011.

"The currently very good performance in Chile is a result of the low production in the Chilean industry the last years. Very strong growth in the industry's smolt stocking and reports of sea lice issues and increased use of antibiotics are indications that the currently good farming conditions may be at risk. We will have to evaluate our smolt stocking plans for Chile during the second quarter”, says Mr Aarskog.