Puerto Montt, Chile-based salmon producer Multi X said it achieved a “historical” harvest in Q3 2023, resulting in a successful quarter despite high operational costs and lower year-over-year sales prices.
The company’s Q3 2023 harvest volume of Atlantic salmon reached 31,473 metric tons (MT) whole-fish equivalent (WFE), which aligned with its growth plan. The figure represented a 33.8 percent jump when compared to the 23,530 MT WFE harvested in the same quarter of 2022 and was up 8.7 percent when compared to Q2 2023. Meanwhile, Multi X sold 35,097 MT WFE of salmon in the third quarter, representing a 53.9 percent surge year over year.
The company also achieved an average harvest weight of 5.28 kilograms WFE during the period. More than half of its volume sold were fillets at 53 percent, up 68 percent from the same time last year; while 32 percent of volume sold was comprised of whole salmon, which was a 40 percent jump.
With the increased volume sold, Multi X’s Q3 operating income reached USD 258 million (EUR 240 million), a 45.4 percent increase compared to the same quarter a year ago.
However, lower average sales prices and increased costs took their toll on the company’s bottom line. The Q3 report cited that market prices for salmon dropped from USD 6.01 (EUR 5.58) per pound in Q3 2022 to USD 5.71 (EUR 5.30) per pound in Q3 2023. The cost of sales also increased by 63 percent year over year from USD 145 million (EUR 135 million) to USD 236 million (EUR 219 million), which Multi X said was mainly due to higher operational farming costs.
Additionally, increased fish feed prices and inflationary pressures led to a 7.2 percent increase in ex-farm costs, reaching USD 4.62 (EUR 4.29) per kilogram WFE compared to USD 4.31 (EUR 3.99) in the third quarter of 2022. There was also a 24 percent year-over-year surge in harvest and transportation costs, as more of the quarter's harvest occurred in a region with cooler waters that are less prone to algae blooms, but at a location farther from the company’s logistics centers.
As a result, Multi X’s operating margin dropped 32 percent year over year to USD 22.3 million (EUR 20.7 million). Overall earnings before interest and taxes (EBIT) totaled USD 13.3 million (EUR 12.3 million), which was 46 percent lower than the USD 24.6 million (EUR 22.8 million) registered in the same quarter of the previous year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) fell 34 percent to USD 20.4 million (EUR 18.9 million).
Before fair-value adjustments, consolidated profit for the period dropped 62 percent to USD 5.8 million (EUR 5.4 million), compared to the USD 15 million (EUR 13.9 million) posted in Q3 2022. However, a USD 22.8 million (EUR 21.2 million) hit in fair-value adjustment in the Q3 2022 led to Multi X posting a net loss of USD 1.6 million (EUR 1.5 million) last year; the fair-value hit in this year’s period was just USD 3.3 million (EUR 3.1 million), leading to net profits of USD 3.35 million (EUR 3.11 million).
The company, formerly known as Multiexport, is the top producer of smoked salmon in Chile, the second-largest producer of Atlantic salmon in Chile, the country’s third-largest salmon producer overall, and is within the top six largest producers of Atlantic salmon worldwide. Multi X has pledged to achieve carbon neutrality by 2030, committed to sending zero waste to landfills across its operations by 2025, and reduce its antibiotic use by a further 60 percent by 2025. Currently, all of its farms are operating under Best Aquaculture Standards (BAP) standards, and one-third of its facilities are under Aquaculture Stewardship Council (ASC) standards. More than 25 percent of its production involves no antibiotics.
In April 2022, Multi X shareholders approved agricultural giant Cargill’s 24.5 percent purchase of the company. Mitsui, which has been a Multi X shareholder since 2015, increased its shareholding in Multi X by 1.13 percent to also reach the same 24.5 percent ownership threshold as Cargill. Multiexport Foods kept control of the company, holding 51 percent of total shares.
Multi X announced the launch of super-premium smoked salmon in the U.S. market in April 2023.
Photo courtesy of Multi X
