Salmones Camanchaca continues to see negative COVID-19 impacts in Q4
Santiago, Chile-based Salmones Camanchaca has reported a revenue hit due to lower demand and pricing for the company's salmon products as a result of the COVID-19 pandemic.
In 2020, Camanchaca's revenue dropped 52.7 percent to USD 65.8 million (EUR 54.5 million) while expenses remained relatively flat at USD 5.2 million (EUR 4.3 million), bringing earnings before interest, taxes, debt, and amortization (EBITDA) to a USD 8.7 million (EUR 7.2 million) loss. The company had posted revenue of USD 37.5 million (EUR 31.1 million) in 2019.
Net losses in Q4 2020 reached USD 7.5 million (EUR 6.2 million) versus net profits of USD 16.1 million (EUR 13.3 million) in Q4 2019.
“In this unique pandemic context, affecting production and markets, Salmones Camanchaca was able to maintain business continuity on both sides, reinforcing its competencies to effectively address challenges of various natures,” Salmones Camanchaca Vice Chairman Ricardo García said in a statement released on the Oslo Bourse. “Our main objectives were protecting our employees' health and their families, and with them, the health of the company. We did it and with it, became more efficient and flexible to exploit future market opportunities, one of which is a favorable consumer new trend: they eat salmon at home, a super-simple and superfood protein. That will add several kilos of salmon consumption once restaurants are fully open during this coming Northern [Hemisphere] summer time.”
Camanchaca saw a 22 percent year-over-year decrease in harvest volumes during the fourth quarter of 2020, reaching a total volume of 15,800 metric tons (MT) whole-fish equivalent (WFE) during the period. Full-year 2020 harvest volume reached 52,980 MT WFE, in line with the company's expectations.
Camanchaca reported salmon prices were down 27 percent year-over-year in Q4, while sales volume fell 35 percent. Atlantic salmon live fish (ex‐cage) costs increased to USD 3.43 (EUR 2.84) per kilogram during the quarter, versus USD 3.02 (EUR 2.50) per kilogram in the same period of 2019 and above the company’s long-term target of USD 3.00 (EUR 2.48) per kilogram.
Camanchaca attributed the higher costs to what it said were “extraordinary mortalities and performance of remaining fish following the unusual Islotes incident in May 2020.” That mass salmon mortality event brought losses of USD 4.1 million (EUR 3.5 million) at the time, as tough weather conditions killed off 30 percent of its Atlantic salmon at the site, and an estimated additional 38,316 fish escaped – though nearly 10,000 were later recaptured. The company said the knock-on effect of that biomass loss and biological challenges will likely impact the company's Q1 performance as well.
“Entering first quarter 2021, the situation remains challenging. However, with extensive vaccination programs ongoing, both in Chile and in our [other commercial] markets, we expect gradually to move back to pre COVID-levels, now boosted by the mentioned trend,” García said. “Combined with our outlook for a tighter supply, our core market will see higher prices, while our ex-cage cost normalized during the second half of 2021.”
Camanchaca expects to invest a total of USD 29 million (EUR 24 million) in 2021, of which USD 10.2 million (EUR 8.4 million) would go towards increasing capacity. It provided harvest volume guidance of 56,000 to 57,000 MT whole fish equivalent (WFE) for 2021; 53,000 to 54,000 MT WFE for 2022; 70,000 to 71,000 MT WFE for 2023; 69,000 to 70,000 MT WFE for 2024 and 72,000 to 73,000 MT WFE for 2025; mostly from Atlantic salmon but with an increasing weighting from trout or coho.
Photo courtesy of Camanchaca