Strong salmon demand lifts Mowi’s second-quarter earnings

Published on
August 25, 2021
Mowi CEO Ivan Vindheim announced the company had improved its performance in Q2 2021.

The easing of lockdown restrictions globally and the subsequent strengthening demand for salmon helped Bergen, Norway-headquartered Mowi post higher second-quarter 2021 operational earnings before interest and taxes (EBIT) and revenue.

Mowi posted an operational EBIT of EUR 137.1 million (USD 160.6 million), an increase of EUR 38.5 million (USD 41.1 million) on the operational EBIT achieved in the corresponding period of 2020.

The salmon farming group also saw spot prices for salmon increase by 18 percent in Europe and 50 percent in the Americas in the quarter, amid returning demand in foodservice and demand holding firm in retail channels.

According to its latest results statement, Mowi’s operational revenues for the most-recent quarter topped EUR 1 billion (USD 1.2 billion), up from EUR 910.9 million (USD 1.1 billion) in Q2 2020. In line with previous guidance, its total harvest volume for the three months was 107,977 metric tons (MT) gutted weight, up from 104,303 MT in Q2 2020, and 98,483 MT in Q2 2019.

Mowi's full-year 2021 harvest forecast has been increased by 5,000 MT to 450,000 MT.

“Demand for salmon has strengthened as COVID-19 measures have become less restrictive in most countries,” Mowi CEO Ivan Vindheim said. “The demand response was impressive during the quarter, with approximately 25 percent higher global salmon prices year-on-year, despite a relatively high global supply growth of 9 percent, including frozen inventory release from Chile.”

Mowi's farming endeavors improved on the back of higher prices and stable harvest volumes and cost, while its consumer products division achieved record-high volumes for the second consecutive quarter, it reported.

Mowi’s farming segment’s operational EBIT almost doubled to EUR 110.7 million (USD 129.7 million) in the last quarter. Its salmon of Norwegian origin achieved an operational EBIT-per-kilogram of EUR 1.37 (USD 1.61) in the last quarter, up from EUR 1.07 (USD 1.25) in Q2 2020. Mowi’s salmon of Scottish, Chilean, and Faroese origin also reported higher operational EBITs-per-kilogram of EUR 1.56 (USD 1.83), EUR 0.98 (USD 1.15), and EUR 1.91 (USD 2.24), respectively, while its Irish salmon decreased to EUR 1.84 (USD 2.16) per kilogram. It’s salmon of Canadian also posted a higher EBIT-per-kilogram, which still represented a loss of EUR 0.51 (USD 0.60).

Moving forward, Mowi has decided to split up its largest farming unit, Norway Region Mid, into two new regions; West and Mid. Joining from SalMar, Olaf Skjærvik has been appointed new managing director of Region Mid, while current Region Mid Managing Director Asgeir Hasund will be the new managing director of Region West.

“Fish farming is still very much about the details and craftmanship, which call for a great deal of hands-on management, particularly in the more biologically challenging areas. This reorganization will enable us to improve our operational performance, including productivity and cost, in this important farming area for Mowi,” Vindheim said.

Mowi’s consumer products segment’s operational EBIT totaled EUR 16.2 million (USD 19 million), down from EUR 23.3 million (USD 27.3 million) in Q2 2020, due to higher raw material prices, while its revenues climbed to EUR 665 million (USD 779.2 million). The total volume sold was 57,732 MT.

Its feed segment reported an operational EBIT of EUR 3.3 million (USD 3.9 million), down from EUR 6.1 million (USD 7.1 million) a year previously, with lower feed production of 107,412 MT – of which 96,142 MT was sold.

Mowi confirmed that while global consumption growth was as high as 9 percent in the last quarter, the global supply of salmon had a limited increase of 1.1 percent to 564,700 MT, gutted-weight. In terms of contributions, Norway supplied 287,500 MT, up 5.9 percent; Scotland 48,000 MT, up 17.1 percent; Chile 135,100 MT, down 14.2 percent; and North America 37,800 MT, down 2.1 percent.

Meanwhile, several MOWI branding launches were undertaken during the last quarter, including MOWI Pure in Belgium, MOWI Gourmet and Signature in Italy, and MOWI Sushi in Spain.

“We continue our long-term quest to decommoditize the salmon category through our MOWI branding strategy, and it is exciting to see how well our branded products are being received by consumers throughout Europe, Americas, and Asia,” Vindheim said.

Also in the quarter, Mowi entered into a new five-year green facility worth EUR 1.8 billion (USD 2.1 billion) with its bank consortium, with Vindheim stating that “sustainability is deeply engrained” in Mowi’s culture and that he was very pleased that the group had now reached 85 percent green and sustainable financing with the facility.

Mowi’s board has decided to pay a quarterly dividend of NOK 1.96 (USD 0.22, EUR 0.19) per share, consisting of NOK 0.96 (USD 0.11, EUR 0.09) per share in ordinary dividend and an extraordinary dividend of NOK 1 (USD 0.11, EUR 0.10) per share.  

Photo courtesy of Mowi

Contributing Editor reporting from London, UK

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