Increased salmon volumes help deliver Mowi’s best ever second quarter

Norwegian-headquartered salmon farming company Mowi has set a new second-quarter earnings record thanks to significantly increased harvest volumes coupled with strong prices and high demand. 

Mowi achieved operational earnings before interest and taxes (EBIT) of EUR 211.2 million (USD 234.4 million) in the second-quarter of this year. This latest EBIT was EUR 36 million (USD 39.9 million), or 20 percent, more than that recorded in Q2 2018, and is 6.7 percent higher than the record second-quarter the company posted in 2017 of EUR 197.9 million (USD 219.6 million).

According to its latest results statement, the company’s operational revenues for the last quarter exceeded EUR 1 billion (USD 1.1 billion), up from EUR 888.4 million (USD 985.7 million) in Q2 2018. The total harvest volume for the three months was 98,483 metric tons (MT), up from 78,346 MT in Q2 2018 and 78,612 MT in Q2 2017. 

Its harvest guidance for 2019 is unchanged at 430,000 MT.

“This was a good quarter for Mowi with 26 percent increase in farming volumes year over year and an overall solid operational performance,” Alf-Helge Aarskog, CEO of Mowi, said. “The costs decreased in the farming operations, and sales of both feed and value-added products were [at a] record-high.” 

In the last quarter, its salmon of Norwegian origin achieved an operational EBIT-per-kilogram of EUR 2.45 (USD 2.71), down from EUR 2.56 (USD 2.94) in Q2 2018. Mowi’s salmon of Scottish, Canadian and Chilean origin reported an operational EBIT-per-kilogram of EUR 2.92 (USD 3.24), EUR 0.83 (USD 0.92) and EUR 1.87 (USD 2.07) respectively, while its Irish and Faroese salmon reached EUR 2.66 (USD 2.95) and EUR 2.63 (USD 2.92) per kilogram.

Farming costs were reduced across several categories, including labor, health, primary processing and overheads. 

Its consumer products segment reported an operational EBIT of EUR 4.9 million (USD 5.4 million), down from EUR 12 million (USD 13.3 million) in Q2 2019, with 47,278 MT of products sold (up from 41,786 MT in Q2 2018).

Mowi Feed reported an operational EBIT of EUR 3 million (USD 3.3 million), up from EUR 800,000 (USD 887,502), with a seasonal high feed production of 104,389 MT, of which 86,321 MT was sold.

Following Mowi’s self-sufficiency strategy on feed, Mowi Feed continues to develop its own range of products, including freshwater, organic and cleaner fish diets.

“Our new feed plant in Scotland started trial production in May, and has recently started to produce and deliver feed to our Scottish farming operations,” Aarskog said. “This is an important step towards self-sufficiency of feed and further integration of the value chain. It is particularly encouraging that we have increased production capacity from 170,000 MT to 240,000 MT.”

Mowi’s results statement highlighted that the global supply of salmon increased by 8 percent in the last quarter to 540,700 MT, which led to some pressure on spot prices year-over-year, but prices were stable and at a high level compared to the first quarter. 

It also stated the outlook for the salmon farming industry is strong, with the megatrends supporting increased salmon consumption remaining intact while the supply is expected to be modest going forward. 

The 12-month forward Nasdaq price is EUR 5.90 (USD 6.54) per kilogram and contract prices are at good levels, Mowi said. 

Image courtesy of Mowi


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