CEO Jon Hindar stated this was a total satisfactory result based on the current challenging salmon market. (Photo: Stock File/FIS)

Cermaq Q3's 'satisfactory' results despite complicated salmon market

NORWAY
Wednesday, October 24, 2012, 01:00 (GMT + 9)

Cermaq’s EBIT pre fair value and biomass write-down for Q3 2012 was NOK 232 million (EUR 31.4 million) from NOK 348 million (EUR 47.1 million) year-on-year. EBIT pre fair value was NOK 180 million (EUR 24.3 million) following write-downs in Canada due to an IHN virus outbreak and in Norway from a PD outbreak.

“This is in total a satisfactory result based on the current challenging salmon market,” said CEO Jon Hindar. “The underlying operational farming cost has been stable with a reduction in Mainstream Norway, which previously was communicated and expected. EWOS is at the same time demonstrating its capability of optimising the production capacity in a peak production period.”

EWOS sold 388,000 tonnes of fish feed in third quarter 2012, up 5 per cent against third quarter 2011, due to a volume increase in Norway of 16 per cent. In other regions, volume fell.

EBIT pre fair value increased to NOK 346 million (EUR 46.8 million) from NOK 290 million (EUR 39.2 million) in the corresponding quarter last year.

Mainstream Norway reported an EBIT pre fair value of NOK 10 million (EUR 1.4 million) representing a loss of NOK 10 million (EUR 1.4 million), excluding the NOK 20 million (EUR 2.7 million) biomass write-down due to PD.

EBIT pre fair value per kg was NOK 0.8 (EUR 0.11) compared to NOK -1.2 (EUR -0.16) in the third quarter of 2011. For Nordland, it was NOK 2.0 (EUR 0.27) versus NOK 2.3 (EUR 0.31) and Finnmark was NOK -2.4 (EUR -0.32) against NOK -25.6 (EUR -3.46).

The production cost in both regions dropped compared to Q2 2012, but a 4,000 tonnes lower sales volume compared to previous estimates harmed the cost per kg for Finnmark.

Mainstream Canada's EBIT pre fair value was a loss of NOK 26 million (EUR 3.5 million) compared to a profit of NOK 7 million (EUR 946,909) in Q3 2011. The corresponding EBIT pre fair value per kg was NOK -4.6 (EUR -0.62) versus NOK 1.1 (EUR 0.15), mainly caused by lower prices.

Mainstream Chile had an EBIT pre fair value loss of NOK 57 million (EUR 7.7 million) compared to a profit of NOK 65 million (EUR 8.8 million) in the third quarter of last year. EBIT pre fair value per kg was NOK -8.2 (EUR -1.1) versus NOK 7.7 (EUR 1.04) a year ago.

For all species the prices were significantly lower compared to Q3 2011 and Q2 2012. Production cost increased year-on-year, but fell somewhat compared to Q2 2012. The biological performance is generally stable.

The acquisition of Cultivos Marinos Chiloé was completed in early October, adding above 30,000 tonnes of new capacity for Mainstream Chile; the acquisition will ensure improved flexibility in the combined farming business in Chile and support Mainstream's "four cornerstone" strategy for sustainable operations. Preliminary direct synergies have been estimated at around USD 6 million per year with full impact from 2014. 

Related articles:

- Cermaq quarter results affected by disease outbreaks
- Cermaq sees improvements, negative cash flow in Q2

By Natalia Real
editorial@fis.com
www.fis.com

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