Strong market drives Cermaq 3Q earnings


SeafoodSource staff

Published on
November 8, 2013

Cermaq on Friday announced it’s third quarter EBIT was NOK 113 million (USD 18.6 million, EUR 13.9 million), up from a loss of NOK 97 million (USD 16 million, EUR 12 million) in the third quarter of 2012. The company said the improvement is primarily due to higher salmon prices which has lifted earnings in all farming regions.

Operating revenues of NOK 1.1 billion (USD 181 million, EUR 135 million) compared to NOK 700,000 in the same quarter last year.

Volumes sold in the third quarter were 27,900 tons, an increase of 3,400 tons from the same quarter last year.

The company’s subsidiary Mainstream reported EBIT of NOK 144 million (USD 24 million, EUR 18 million), compared to a loss of NOK 73 million (USD 12 million, EUR 8.9 million) the previous year. Mainstream Canada reported an EBIT of NOK 43 million (USD 7 million, EUR 5.3 million), an improvement from a loss of NOK 26 million (USD 4.3 million, EUR 3.2 million) the previous year, even though volumes sold declined from 5,600 tons to 4,400 tons. Good prices in the North American market and the IHN outbreak last year are the main factors behind the improved result.

Mainstream Chile's earnings in third quarter improved significantly versus last year with EBIT at break-even level, and the Chilean operation also saw an earnings improvement towards the end of the quarter. EBIT for the same quarter last year was a loss of NOK 57 million (USD 9.4 million, EUR 7 million). Volumes sold increased from 7,000 tons to 10,600 tons.

Mainstream Norway delivered an EBIT pre fair value of NOK 8 (USD 1.31, EUR 0.98) per kilogram (kg) versus NOK 0.8 (USD 0.13, EUR 0.1) per kg last year, and volumes sold of 12,800 tons that is 900 tons more than last year. EBIT for Nordland was NOK 9.7 (USD 1.60, EUR 1.19) per kg and NOK 5.7 (USD 0.94, EUR 0.70) per kg for Finnmark. The PD outbreak in July had a negative EBIT impact of NOK 25 million (USD 4.1 million, EUR 3 million) for the Finnmark operation.

Cermaq expects 20,000 tons, increased sales volume in 2014 compared to 2013. Half of this increase will be in Norway and Canada. Volumes sold in Canada will revert back to a normal level after the IHN outbreak in 2012. The increase in Norway is driven by better capacity utilization in Finnmark and rebuilding of volumes after the PD outbreak. The growth in Chile is primarily a consequence of the reallocation of capacity towards Atantics from trout after the acquisition of CMC in 2012.

“The current market balance and Mainstream’s production plans indicate a good Coho season, and we also see strong demand from new markets such as Brazil and Russia,” CEO Jon Hindar said. “This is an acceptable quarter where a strong market has helped improve results in all regions. Profitability in Chile is still too weak, but both operations and earnings at the end of the quarter showed a positive development.”

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