Chile’s largest salmon-farming firm, AquaChile, strengthened its weighting in overall contributions to parent company Agrosuper’s top line as the aquaculture division outperformed the holding’s meats division during the second quarter of the year, according to results recently posted by the parent company.
AquaChile is Chile’s largest salmon producer, a conglomerate formed in a 2018 sector consolidation that brought a number of actors – AquaChile, Los Fiordos, Salmones Magallanes, and Friosur – under the same umbrella.
AquaChile’s sales represented 40 percent of Agrosuper’s total top-line earnings in Q2 2023, compared to 35 percent in the same quarter a year prior. Over the same period, Agrosuper’s meat segment weighting fell to 59 percent from 63 percent.
During Q2 2023, 83 percent of Agrosuper’s consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) stemmed from the aquaculture segment. Just 16 percent came from the meat segment, mainly due to an avian influenza outbreak that took its toll on the meats division, the company said. In comparison, during the same quarter of 2022, the meat segment represented 55 percent of EBITDA, and the aquaculture segment brought in 45 percent.
Agrosuper’s overall EBITDA margin for the quarter came in at 7.9 percent, with just 2.1 percent for its meats division compared to 16.4 percent for its aquaculture division.
Total sales in the quarter were USD 1.025 billion (EUR 935 million), 0.2 percent higher than the USD 1.024 billion (EUR 934 million) posted during the same period of 2022. This was mainly due to the increased volume of the aquaculture segment, which hauled in an extra USD 114 million (EUR 104 million), but brought down USD 68 million (EUR 62 million) by lower prices in the sector. Agrosuper’s meat segment saw both lower sales volumes and lower prices.
Agrosuper – a leading supplier in Chile of salmon, chicken, beef, and pork – said that during the second quarter of 2023, the global salmon market experienced a slight increase in supply compared to the same quarter the previous year. An increase in Chilean and Norwegian harvests spurred the growth, but a contraction in Canadian supply partially offset the upturn. Meanwhile, fresh salmon fillet prices in the United States fell sharply with a contraction in demand.
For the first half of the year, Agrosuper garnered total revenues of USD 2.15 billion (EUR 1.96 billion), up 3.9 percent from USD 2.07 billion (EUR 1.89 billion) in the same period of 2022. The company attributed that result to higher sales volumes in the aquaculture segment, but the growth could have been larger without the lower average prices in farmed fish the company dealt with.
Cost of sales increased 19.2 percent to USD 1.74 billion (EUR 1.59 billion) from USD 1.46 billion (EUR 1.33 billion).
The aquaculture segment’s revenues increased 5.2 percent to USD 805 million (EUR 734 million) in H1 2023 when compared to the first half of 2022. Its EBITDA without considering fair value decreased 33.6 percent year over year, though, to USD 119 million (EUR 109 million).
Agrosuper’s overall sales costs for the first half of 2023 were USD 1.74 billion (EUR 1.59 billion), 19.1 percent higher than in the same period of 2022. The main factor for this was higher raw materials costs for food manufacturing, higher spending on industrial inputs, and expenses incurred in the mitigation of both avian flu events, which cost the meat segment USD 12.3 million (EUR 11.2 million), and an infectious salmon anemia (ISA) virus event which cost the aquaculture segment USD 9.8 million (EUR 8.9 million).
When considering fair value, Agrosuper’s gross margin dropped to USD 285 million (EUR 260 million) in the first half of 2023 from USD 629 million (EUR 574 million) in the same period one year ago. EBITDA was down 53.2 percent year over year to USD 186 million (EUR 170 million).
In the first half of the year, Agrosuper fell USD 55.5 million (EUR 50.6 million) into the red, compared to net profits of USD 213 million (EUR 194 million) during the first half of 2022.
Agrosuper’s aquaculture segment includes the production, processing, distribution, and sale of Atlantic and coho salmon products in the national and international markets under its Aqua and Verlasso brands. The company has its own egg and smolt breeding program, grow-out centers and concessions, and technological processing plants.
AquaChile’s vertically integrated business process allows for complete traceability, quality, and biosafety standards. It possesses multiple certifications, including ISO 9001 and hazard analysis and critical control points (HACCP) both of which concern product quality; International Food Standard (IFS) level v5; Global GAP and BAP, both of which relate to effective practices in agriculture and aquaculture; and a Kosher certification, among others.
In addition, Agrosuper said its aquaculture products are authorized to be in or are actively in the process of authorization to enter the world’s main economic markets, meaning its addressable market reaches 4.2 billion people – comprising more than 85 percent of global GDP.
Photo courtesy of AquaChile
