Severe algae blooms and the resulting mass mortality, coupled with lower market prices and reduced sales, took their toll on Santiago, Chile-based salmon farmer Camanchaca, which closed Q1 with negative earnings before interest taxes debt and amortization (EBITDA) of USD 7.4 million (EUR 6.2 million), compared to a positive EBITDA of USD 15.1 million (EUR 12.4 million) in the first quarter of 2020.
Had it not been for the 3,700 metric tons (MT) in extraordinary mortalities that affected its centers in the Reñihué and Comau fjords during the quarter, the company would have posted EBITDA at breakeven point, Camanchaca said in a statement to the Oslo bourse.
However, at the same time, Camanchaca reported a 30 percent year-on-year decrease in Q1 harvest volumes, reaching a total of 9,163 MT whole fish equivalent (WFE) with an average weight of 4.7 kilogram. Farming costs for the quarter were USD 3.91 (EUR 3.22) per kilogram live weight, 24.1 percent higher than the same period last year, due to a biomass loss of 25 percent at its Islotes site in May 2020, which in turn now affected harvest volumes.
Operating revenue fell 17 percent to USD 70 million (EUR 57.7 million) during the quarter due to an 11 percent decrease in both sales volume and prices.
“The incidents of harmful algae blooms in the Reñihue and Comau fjords had severe implications for operations during the quarter and combined with the repercussion of the Islotes incident last year and overall weak market conditions due to the COVID-19 pandemic, earnings were heavily impacted during the quarter. Losses from the incidents will also have implications on harvest volumes going forward,” Salmones Camanchaca vice chairman Ricardo García said in the statement. “However, the market conditions are favorable with a solid recovery of demand and a double-digit decline in Chilean supply by 2021.”
Salmones Camanchaca provided guidance of 41,000 to 44,000 MT WFE for the Atlantic harvest for the full year 2021, down from the previous estimate of 53,000 MT WFE.
With respect to the COVID-19 pandemic, as of the date of the report, more than 75 percent of its 1900 employees had been vaccinated with at least the first dose, García noted. Further, of the more than 47,000 tests conducted, only 0.44 percent produced positive results.
Salmones Camanchaca is a vertically and fully integrated salmon producer with operations in farming, processing, marketing and sale of salmonids. It harvested 53,000 MT WFE from its core business of Atlantic salmon farming in 2020, and it has ventured into Pacific salmon farming. Overall salmonid production at its own sites is projected to reach 60,000 to 65,000 MT WFE in 2023.
Photo courtesy of Camanchaca
