Marine Harvest posts record annual profits and turnover, initiates USD 60 million savings program
Norway-headquartered salmon farmer Marine Harvest achieved operational earnings before interest and taxes (EBIT) of EUR 180.8 million (USD 224.1 million) in the fourth quarter of last year, down from EUR 259.4 million (USD 321.5 million) in the corresponding period of 2016, with the reduction largely attributed to lower market prices.
However, the company’s EBIT for 2017 as a whole reached an all-time-high of EUR 792 million (USD 981.4 million), representing a EUR 92 million (USD 114 million) increase on the previous year.
Marine Harvest also achieved an operational revenue of just over EUR 1 billion (USD 1.2 billion) in the last quarter, contributing to a record annual turnover of almost EUR 3.7 billion (USD 4.6 billion).
The total volume harvested by the group in the last quarter was 112,628 metric tons (MT) gutted weight equivalent (GWE), up from 99,634 MT in Q4 2016 and 110,551 MT in Q4 2015. For 2017 as a whole, it harvested 370,346 MT, which was almost 10,000 MT less than in the previous year. Its harvest guidance for 2018 is 410,000 MT.
Alf-Helge Aarskog, CEO of Marine Harvest, said that the global harvest growth in the industry put pressure on the salmon prices in all markets in Q4 2017. At 603,400 MT, the last quarter’s total salmon harvest was 16.1 percent higher than the previous year.
“It is encouraging to see that the supply is growing, but the market needs time to adapt to the recovery after the significant global supply contraction in 2016,” said Aarskog.
The operational EBIT of Marine Harvest’s salmon of Norwegian origin in Q4 2017 was EUR 1.77 (USD 2.19) per kg, down from EUR 2.70 (USD 3.35) in Q4 2016. Operational EBIT reductions were also seen in its salmon of Scottish, Canadian and Chilean origin at EUR 1.19 (USD 1.47), EUR 0.98 (USD 1.21) and EUR 1.03 (USD 1.28) per kg respectively.
Aarskog said that 2017 was “a great year” for the company financially, but that he was concerned about the rising cost and the challenging biology. As such, it has initiated a global cost savings program with a target of EUR 50 million (USD 61.9 million) savings. These savings are expected to be realized in all parts of the organization, he said.
Meanwhile, Marine Harvest Norway has been restructured to adapt to the amended fish farming regulations in Norway regarding production areas, and to streamline the organization following the cost increases in recent years. With effect from 1 January 2018, the number of regions in Marine Harvest Norway was reduced from four to three – Region South, Region Mid and Region North.