Marine Harvest encouraged despite reduced first-quarter profit, harvest forecast lowered

Published on
May 10, 2018
Marine Harvest

Norway-headquartered Marine Harvest achieved first-quarter operational earnings before interest and taxes (EBIT) of EUR 158 million (USD 187.3 million) in the opening three months of this year, representing a EUR 62 million (USD 73.5 million) drop on the record Q1 EBIT posted in the corresponding period of 2017.

The salmon farming company also reported operational revenues of EUR 862 million (USD 1 billion) in the last quarter, down from EUR 892 million (USD 1.1 billion) in Q1 2017, while the total harvest volume fell by more than 2,500 metric tons (MT) to 81,212 MT.

Nevertheless, in its outlook statement, the company’s board of directors said that the Q1 results were “encouraging and better than expected,” with salmon prices increasing in all markets compared to the levels seen at the end of last year.

“The recent positive demand response reminds us of the megatrends which supports the long-term outlook of increased salmon consumption,” it said.

Alf-Helge Aarskog, CEO of Marine Harvest, said, “The demand for salmon has increased globally this year, compared to the end of 2017. This has led to high prices and a good result for Marine Harvest in the first-quarter.”

The operational EBIT of its salmon of Norwegian origin in the last quarter decreased to EUR 2.26 (USD 2.68) per kg – down from EUR 2.52 (USD 2.99) in Q1 2017. Operational EBIT reductions were also confirmed in its salmon of Scottish, Canadian and Chilean origin compared to a year previously – amounting to EUR 1.85 (USD 2.19), EUR 1.10 (USD 1.30) and EUR 1.36 (USD 1.61) per kg, respectively. 

Its harvest guidance for the full year 2018 has been reduced from 410,000 MT to 400,000 MT, due to less growth in the sea.

Aarskog also highlighted a “very satisfactory” performance by Marine Harvest’s organic farming operations in Ireland, which achieved record high first-quarter results – thanks to strong demand and reduced costs.

Marine Harvest Ireland’s Q1 2018 operational EBIT amounted to a seasonal record of EUR 6.4 million (USD 7.6 million), up from EUR 900,000 (USD 1.1 million) a year previously. At EUR 4.37 (USD 5.18) for the three months, the operational EBIT-per-kg was an all-time high. 

The quarter’s strong earnings were attributed to improved market conditions for organic salmon, reduced costs, and one-offs related to sales of eggs. Meanwhile, the biological costs harvested biomass decreased by 11-percent-per kg compared to Q1 2017. 

Some 1,457 MT gutted weight were harvested in the last quarter (up from 633 MT) with the increase due to volumes being carried over from Q4 2017 in order to gain more growth. 

In the past 12 months, Marine Harvest Ireland, including contributions through the value chain, delivered an operational EBIT in excess of EUR 35 million (USD 41.5 million) on harvest volumes of 10,000 MT gutted weight of organic salmon.

Contributing Editor reporting from London, UK

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