Aarhus, Denmark-headquartered aquaculture feed supplier BioMar Group saw a decline in sales volumes and revenue in Q3 2024 and announced that its parent company Schouw & Co. is evaluating whether to potentially list BioMar separately.
BioMar sold 429,000 metric tons (MT) in sales volume in Q3 2024, down from the 466,000 MT it sold in Q3 2023. Its consolidated companies achieved DKK 5.11 billion (USD 727 million, EUR 685 million) in revenue for the quarter, down from DKK 5.81 billion (USD 826 million, EUR 778 million).
BioMar also posted a lower EBITDA that coincided with the drops in revenue and volume. The company reported an EBITDA of DKK 463 million (USD 65.8 million, EUR 62.1 million), down from the DKK 470 million (USD 66 million, EUR 63 million) it posted in Q3 2023.
Despite lower results in the quarter, BioMar said its performance was still solid and indicated it will reach its earnings goal for the year. However, it revised its full-year revenue expectations downward due to decreasing raw material prices and other factors.
"In general, we are performing well across divisions despite challenges related to biological conditions in Norway and the Ecuadorian energy crisis, which has impacted our production of shrimp feed,” BioMar CEO Carlos Diaz said in a release. “Our focus on functional feed solutions combined with shared value creation with our customers is providing tailwind.”
Ecuador’s energy crisis has been ongoing since September as historic droughts limit the country’s ability to produce hydropower – which comprises nearly 60 percent of all electricity the country generates. The power issues have caused rolling blackouts and power outages that are negatively impacting the country’s shrimp industry, which in turn has lowered demand for BioMar’s feed products.
Year to date in 2024, BioMar has sold 1.024 million MT of products, slightly behind the 1.093 million MT it sold in the same period of 2023. Its revenue for the year so far has also dropped slightly to DKK 12.4 billion (USD 1.7 billion, EUR 1.6 billion), down from the DKK 13.7 billion (USD 1.9 billion, EUR 1.8 billion) in 2023.
In contrast to the drops in revenue and volume, BioMar’s earnings have gone up for the year so far. BioMar posted an EBITDA of DKK 1.09 billion (USD 155 million, EUR 146 million) for the first nine months of the year, up from DKK 853 million (USD 121 million, EUR 114 million).
“Although revenue has decreased due to stable volumes and lower raw material prices, earnings have increased due to an emphasis on commercial and operational efficiency and a shift towards long-term customer relationships,” BioMar said.
Considering the Q3 2024 results, Diaz said BioMar has had to “slightly narrow the full-year EBITDA expectations for 2024,” reducing it to between DKK 1.41 billion and DKK 1.46 billion (USD 200 million and USD 207 million, EUR 189 million and EUR 195 million).
Alongside its results announcement, BioMar also revealed its parent company Schouw & Co. is evaluating a separate listing of BioMar.
“Since BioMar became part of the Schouw & Co. Group in 2005, we have grown to become a leading global producer of sustainable aquaculture feeds and have almost six-doubled our revenue,” Diaz said. “A potential separate listing of BioMar could provide the right platform for BioMar to continue our growth trajectory.”
According to a letter sent by Schouw & Co. to the Danish Financial Supervisory Authority, when it first purchased BioMar, the company had revenues of DKK 2.6 billion (USD 370 million, EUR 348 million), with an EBITDA of DKK 124 million (USD 17 million, EUR 16 million). Since that time, it has grown to an expected 2024 revenue of DKK 16.5 billion to DKK 17 billion (USD 2.3 billion, EUR 2.2 billion), with expected EBITDA of between DKK 1.41 billion and DKK 1.46 billion.
Schouw & Co. said BioMar is the largest company in its portfolio, accounting for nearly half of its revenue and EBITDA each year. A separate listing for BioMar will help ensure Schouw & Co. has the resources for its other portfolio companies, it said.
“The purpose is to investigate whether this would be value-creating for Schouw & Co. while at the same time securing BioMar the best opportunities for continued growth,” the company said. “Schouw & Co. intends to remain the majority shareholder of BioMar after a potential IPO.”
Schouw & Co. CEO Jens Bjerg Sørensen said BioMar has grown “remarkably” since its acquisition in 2005, and a separate listing could accelerate that growth.
“A potential separate listing of BioMar could provide the right platform for BioMar to continue its growth trajectory and at the same time offer investors the opportunity to directly invest in a leading pure-play aquaculture specialist in a growing market driven by megatrends,” he said.
The company added that there is no guarantee it will pursue a separate listing, and if it does pursue one it is unclear when it will be completed.
“However, if Schouw & Co. decides that a separate listing of BioMar is the right way forward, this may at the earliest take place in the second half of 2025,” Schouw & Co. said.
