Mixed performances by Cermaq operations, annual profits fall

Published on
May 8, 2015

High salmonid prices, particularly in the first half of last year, have led to the Cermaq Group posting an operating revenue of NOK 5.6 billion (EUR 667.2 million; USD 749.4 million) for 2014, an increase of 9 percent or NOK 460.8.million (EUR 54.9 million; USD 61.7 million) on the previous year.

However, the company which is owned by the Japanese conglomerate Mitsubishi Corporation, saw its operating profit slide by NOK 66.8 million (EUR 8 million; USD 8.9 million) to NOK 428.1 million (EUR 51 million; USD 57.3 million).

Lower volumes sold, biological challenges in Chile with high production costs for Atlantic salmon and trout, as well as a NOK 88 million (EUR 10.5 million; USD 11.8 million) write-down of frozen stocks in the South American country, were the main reasons for the dent in operating profit.

Cermaq Norway performed well and reported its best ever operating profit with NOK 537.8 million (EUR 64.1 million; USD 71.9 million), up from NOK 445.3 million (EUR 53.1 million; USD 59.6 million) in 2013. But Chile made a loss of NOK 141.8 million (EUR 16.9 million; USD 19 million), after making a profit of NOK 30.8 million (EUR 3.7 million; USD 4.1 million) in 2013.

Meanwhile, its Canadian business unit’s profits fell to NOK 123.5 million (EUR 14.7 million; USD 16.5 million) from NOK 133.8 million (EUR 15.9 million; USD 17.9 million) in the previous year.

“Cermaq Norway achieved its best operating result ever, while Cermaq Chile's results were weakened by reduced prices in its main markets and a demanding biological situation. The Canadian operation performed well despite reduced market prices in its main market,” said Jon Hindar, CEO of Cermaq.

“Overall, the operating result was impacted Russian trade measures and declining market prices throughout the second half of the year.”
The company had met its growth ambitions throughout last year with respect to new "green licenses" in Norway and additional new licenses in Region XII in Chile, he said.

In total, Cermaq sold 136,700 metric tons (MT) of salmonids in 2014, which was 4 percent less than in the previous year. This decrease is mainly attributed to the challenging market situation for Chilean products toward the end of 2014.

The company said the Salmonid Rickettsial Septicaemia disease (SRS) continued to impact the results in Chile for Atlantic salmon and trout and remains a concern.

“Not only does SRS cause high mortality for Atlantic salmon and trout, but it also is by far the main cause of the increased use of antibiotics in Chile. Therefore the development of efficient vaccines against SRS remains a high priority going forward,” said Hindar.

Cermaq Chile sold a total volume of 68,600 MT last year, down 7,500 MT. Sales volumes from Norway of 50,000 MT were in line with the 2013 harvest and Canada’s harvest increased 19 percent to 18,000 MT.

The company expects its sales volumes to increase this year, with larger harvests from Norway, Chile and Canada.

Contributing Editor reporting from London, UK

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