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Strong Salmon Prices Boost Cermaq's Q1 Profits

Salmonids Economics +2 more

NORWAY - Strong prices in a tight salmon market has driven up earnings for Cermaq in the first quarter of 2013.

Lucy Towers thumbnail

Cermaq reported an profits for the first quarter of NOK 94 million compared to NOK 11 million in fourth quarter 2012 and NOK 101 million in first quarter 2012.

The improvement versus the last quarter of 2012 was driven by a tight salmon market and stronger prices. EBIT pre fair value and including non-recurring items was NOK 141 million.

"The results in the first quarter were satisfactory. Mainstream overturned a significant loss in fourth quarter 2012 into a good profit in the first quarter this year due to strong salmon prices in Norway. The prices achieved by our operations in Canada and Chile have also improved significantly during the quarter after having lagged behind the European prices in late 2012," said CEO Jon Hindar.

"EWOS produced a satisfactory result in a market wooden globally dropped by 11 per cent in volume compared to first quarter 2012 due to lower than normal sea temperatures in Norway. The first quarter is normally the slowest for EWOS," continued Mr Hindar.

Cermaq's operating Revenues were NOK 2860 million (NOK 2328 million) in first quarter 2013. Revenues in EWOS Increased by eight per cent to NOK 2010 million as higher raw material cost lifted average selling prices. Mainstream's revenues were NOK 1238 million, an increase of 64 per cent.

EWOS sold 213,000 tonnes of fish feed in first quarter 2013, a decrease of seven per cent compared to first quarter 2012. Volume in Norway dropped 11 per cent, while the volume in Chile was three per cent lower. EBIT pre fair value was NOK 39 million (NOK 62 million), mainly due to lower production volume.

Mainstream reported an EBIT pre fair value and non-recurring items of NOK 49 million (NOK 60 million) in the quarter. Volumes sold were 43.1 thousand tonnes (26.2 thousand tonnes), an increase of 65 per cent. The EBIT pre fair value per kilogram, gutted weight, was NOK 1.1. A processing facility in Calbuco in Chile was sold as part of the real icing Synergies Following the acquisition of Cultivos Marinos Chiloé in 2012. The gain of NOK 46 million is classified as a non-recurring item and not included in Mainstream's operating result.

EBIT pre fair value and non-recurring items per kilogram, gutted weight, Mainstream Chile was negative NOK 2.0 (positive NOK 3.7), for Mainstream Canada NOK 3.2 (negative NOK 0.6) and Mainstream Norway NOK 5.8 (probably 1.2).

"While the price development in the Americas has been a positive factor during the quarter, the biological environment in Chile continues to be challenging, in particular relating to sea lice levels and SRS. The situation is manageable, but Mainstream is following the situation closely, and is working with both the industry and the regulators to improve the situation," said Jon Hindar.

Mainstream expect sales volume for 2013 of 148,000 tonnes, 23 per cent up from 2012, due to growth in Mainstream Chile . Limited supply growth in combination with robust demand should continue to support a strong salmon market. The feed market expects to be fairly stable during the rest of the year.

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