Santiago, Chile-based seafood firm Camanchaca plans to purchase the remaining 30 percent of share capital it did not already own in subsidiary Camanchaca Pesca Sur, the company reported to Chile’s securities regulator CMF.
Two investment banks were commissioned to determine the full value of the subsidiary, and its average valuation ended up approaching USD 291 million (EUR 270 million), which meant minority owner Grupo Bio Bio’s 30 percent of shares were worth USD 87.2 million (EUR 80.8 million).
The process is likely to close in the short term, Camanchaca said, without specifying a date, and is not expected to have immediate effects on Camanchaca’s income statement.
In a separate statement reviewing the company’s 2023 results, Camanchaca CEO Ricardo García said that the valuation was higher than what the company anticipated in 2022, attributing it mainly to the good state of horse mackerel biomass that the current Chilean fishing law has allowed, together with the high valuation of seafood proteins and oils around the world.
“The banks [involved in the] valuation were optimistic that the rules of the game would be respected in Chile and that the state will not illegitimately appropriate the rights and licenses granted in the past. This legal framework has allowed for large investments and required a lot of patience to wait for the recovery of fisheries that were weakened 10 years ago,” he said.
García said he is wary, though, of changes coming to fisheries governance in the near future in Chile.
At the end of 2023, Chile’s President Gabriel Boric sent a bill to congress that sought to replace the country’s contentious existing fisheries law, which he and others claim has allowed for instances of corruption in the nation’s fishing sector. Aiming to redistribute resources in favor of artisanal fishing while prioritizing sustainability, the bill proposes to decrease the total allowed quota for the industrial sector from 85 percent to 50 percent.
“As a company, we view this bill sent to the House with extreme alarm, as it despoils legitimate property rights,” García said. “We assume the obligation to make this large purchase, which is an investment at a political moment of great uncertainty in Chile and a bill that is very harmful to companies and the economy. But, if legislative discussions are moderate and based on facts, reason, and respecting people’s rights and a good law is achieved, this could allow an environment of trust that makes it possible to continue working and investing and, thus, pay the obligations assumed with this 30 percent acquisition of Camanchaca Pesca Sur.”
A more balanced law would “also allow conditions for more development in the areas where we operate, with stable jobs and sustainable production of healthy and nutritious food for Chileans and those abroad,” he said.
The Camanchaca Pesca Sur purchase announcement came just before the release of Camanchaca’s Q4 results, which the company acknowledged as “weak.”
Full year 2023 revenues reached USD 762 million (EUR 706 million), 5 percent higher than in 2022. Revenue from Camanchaca’s farmed salmon division fell 4 percent due to lower volumes and increased costs, while revenue from its other farming division – comprising mussels and abalone – rose 21 percent.
Camanchaca reached an accumulated earnings before interest, taxes, depreciation, and amortization (EBITDA) of USD 90 million (EUR 83.4 million) in FY2023, 27 percent lower than in 2022.
For the full year, Camanchaca posted net profits of USD 5.4 million (EUR 5 million), dropping from USD 38.2 million (EUR 35.4 million) in 2022.
During the year, Camachaca said sales prices decreased for Atlantic salmon and coho salmon, while farming costs increased due to health incidents and increased salmon feed prices.
Regarding the latter issue, the price of fish oil – a main ingredient in feed, obtained in large part by anchovy fisheries – jumped 82 percent in 2023 due to the El Niño phenomenon, which majorly affected anchovy catches in Peru.
Camanchaca also felt the effects of El Niño in the north of Chile, which resulted in low artisanal catches of anchovy and no industrial catches. Industrial capture of horse mackerel and mackerel fell 11 percent, dipping to 34,000 metric tons (MT) in the north.
The company’s operations in the south of Chile accounted for a large portion of the year's EBITDA for Camanchaca’s fishing division, which it said provided evidence of the recovery of biomass and catches in the fisheries in which the company operates. For the year, Camanchaca captured 100 percent of horse mackerel quota, equivalent to 118,000 MT.
