Financial Information for the period ended as of June 30, 2019 (Photo: Blumar)
‘Significant increase’ of salmon lice and absence of giant squid affect Blumar results
Wednesday, August 21, 2019, 22:50 (GMT + 9)
The aquaculture-fishing company Blumar S.A. reports that in the first half of this year its income fell 16%, compared to the results of the first half of 2018. EBITDA (profit before interest, taxes, depreciation and amortization) and the EBIT (benefit before interest and taxes) also decreased by 41% and 48% respectively.
Blumar Fishing EBITDA Variations MUSD (Source: Blumar)
Profit after taxes registered a decrease of USD 51.1 million, reaching USD 3.2 million in the period. This figure is mainly explained by the fair value variation between both semesters for a total value of USD -45.7 million.
Blumar Aquaculture EBITDA Variations MUSD (Source: Blumar)
Blumar points out that the lower results at the end of the first half of 2019, compared to the same period last year, are due to higher costs in the aquaculture segment and lower fishing results. In the latter segment, the decline is mainly due to the absence of giant squid (Dosidicus gigas) during the first quarter of 2019, which negatively influenced the results of its subsidiary PacificBlu.
Blumar revenue composition by product (Source: Blumar)
In the aquaculture business, the company attributes the lowest result to a 19% increase in the average cost of sales, from USD 4.47 / kg to USD 5.34 / kg WFE. This situation was caused by a 23% increase in the ex-cage Atlantic salmon cost, which was the result of lower harvest productivity due, in large part, to the beginning of the year with a worse health situation, which forced an early harvest at lower average weights than the previous year.
In its report, Blumar explains that the control of the caligus or sea lice in salmon has become difficult this year “due to the loss of effectiveness of the treatment that was mostly used by the industry called azametifos, which began to be detected in some areas during the second half of 2018 and this year the resistance to treatment was extended in almost the entire region of Los Lagos and Aysén.”
"This situation has led to a significant increase in the parasitic loads of fish in the Los Lagos and Aysén regions, but to a greater extent in the latter region," the company added. As an alternative for the treatment of caligus, Blumar began using a system to perform peroxide baths earlier this year, which so far has produced good results, but with higher costs.
Blumar also noted that during July, the authority approved the use of a new tool for the treatment of caligus called Alpha Flux, which is applied through baths to fish up to 800 grams and that will begin to be used during this month. In addition, together with other salmon growers, Blumar is bringing non-drug treatment technologies of Norwegian origin, which it hopes to apply towards the end of this year.
With respect to the fishing segment, this recorded a lower EBITDA of USD 4.0 million at the end of the first half of 2019, compared to the same period of 2018. This variation is explained by a lower result of the PacificBlu subsidiary for USD -7.5 million due to the absence of production and sale of giant squid during the first quarter of the first three months of 2019. However, this situation is contrasted with the best results obtained by both Blumar and Pesquera Bahía Caldera, which together obtained a higher EBITDA for USD 3.5 million thanks to the higher sales volumes of frozen horse mackerel, fishmeal and fish oil.
►Blumar fishing production 2018
At the end of the first half of the year 2019, the total supply of raw material in pelagic fisheries increased by 11% compared to the same semester of the previous year, from 173 million tons to 192 million. This result is due to a greater own capture of +9% due to the good season of horse mackerel and to greater purchases in the north zone by 10 million tons.