Marine Harvest: ‘Challenging’ supply situation
Expect a “challenging” supply situation with continued price pressure this year, Marine Harvest ASA proclaimed as it released its fourth-quarter results on Wednesday.
Favorable sales contracts helped cushion the reality of lower prices in the fourth quarter of 2011, and Marine Harvest managed to post an operational income of NOK 403 million, compared to about NOK 1 billion in the corresponding quarter of 2010. The company — the world’s largest farmed salmon producer — recorded operational revenues of NOK 4.25 billion, down only about 10 percent from the fourth quarter of 2010, and net earnings of NOK 100 million, down from more than NOK 1 billion.
“Spot prices continued to fall in the fourth quarter as markets absorbed an increase in industry supply of 20.5 percent,” said Marine Harvest CEO Alf-Helge Aarskog. “The group achieved an operational EBIT of NOK 403 million mainly due to favorable sales contracts. The reduced price level has resulted in improved results in Marine Harvest VAP Europe and is stimulating global demand in general. We use this momentum to expand the market for Atlantic salmon and attract new customers.”
As for production, Marine Harvest churned out 104,589 metric tons of salmon in the fourth quarter of 2011, up 16 percent from the corresponding quarter of 2010. The company anticipates a harvest of 360,000 metric tons this year, of which 89,000 metric tons will come in the first quarter.
“We expect a challenging supply situation in 2012 with continued pressure on prices,” said Aarskog. “Our sales and marketing unit will continue to exploit the strong demand stimulus from reduced prices to expand the market for Atlantic salmon. In our farming units, we maintain our strong focus on capital efficiency and cost measures to preserve our financial strength. The restructuring of our operations in Canada opens up for improved performance in the second half of 2012.”