Mowi CEO Ivan Vindheim is predicting his company will set a “milestone” achievement with a 2024 harvest of 500,000 metric tons of farmed salmon.
With the delivery an all-time high harvest volume of 135,000 metric tons (MT) in Q3 2023, and a record volume of 484,000 MT projected for the full-year 2023, Vindheim said a 500,000 MT harvest is achievable for the world’s largest salmon faming company in 2024.
“We can and will do more. The smart farming concept, for instance, is just at the starting blocks. Not to mention the ongoing utilization and automization of our value chain. There is definitely more to come,” he said while delivering Mowi’s Q3 2023 results in Oslo, Norway, on 8 November.
In 2018, Mowi’s harvest volume was about 375,000 MT. Most of this 125,000 MT growth over the last six years has been achieved organically, according to Vindheim, with Mowi’s annual growth rate of 4.9 percent ranking ahead of the industry’s 3.2 percent average, and with the gains coming in a “low growth environment.”
“I cannot stress how important this is for us because farming volumes are, at the end of the day, the mainstay of our business model, and what everything hinges on in this industry," he said. "At the same time, we are 600 fewer people in Mowi than back in 2018 so it’s quite a transformational change we are going through on productivity throughout the value chain. I think we can say with humility we are in better shape today than back then."
In Mowi Farming Norway, Mowi’s biggest farming division, volume guidance for 2023 has been increased to a record-high 295,000 MT from 290,000 MT, following good fish growth and operational performance, according to Vindheim. Mowi has set its 2024 volume guidance for the division at 305,000 MT, above the 300,000 MT mark for the first time in Mowi's 60-year history, and up from 2017, when the segment’s harvest total was 210,000 MT.
“Crossing the 300,000-MT-mark in Norway is a milestone for the company and is cementing Mowi Norway’s strong license utilization and production efficiency,” Vindheim said. “I am deeply impressed with our Norwegian organization that continues to deliver growth and results.”
Alongside the best-ever volumes, Mowi recorded record-high operational revenue of EUR 1.36 billion (USD 1.4 billion) in Q3 2023, up 8 percent from EUR 1.26 billion (USD 1.3 billion) in Q3 2022, which it attributed to the harvest volume and “seasonably favorable” salmon prices paired with solid demand. However, its operational profit slipped 15 percent to EUR 203 million (USD 216.1 million), with seasonal prices and biological challenges taking their toll. And its earnings before interest, taxes, depreciation and amortization fell nearly 11 percent year over year to EUR 252.6 million (USD 270.6 million) from 283.4 million (USD 303.5 million) in Q3 2022.
“The driver in our business model is farming, which was a mixed bag in the quarter following rather challenging biology, which is quite typical for this time of year. But this time around it was compounded by the weather phenomenon El Nino, which particularly affected our farming operations outside Norway,” Vindheim said.
According to Mowi’s Q3 2023 report, of the 135,004 MT harvested in the period, its Norwegian operations produced 86,228 MT, while Scotland contributed 14,730 MT, Chile provided 17,651 MT, Canada harvested 7,485 MT, Ireland harvested 1,994 MT, the Faroes produced 2,532 MT, and its Arctic Fish subsidiary – of which Mowi owns 51 percent – produced 4,383 MT.
Mowi’s Scottish operations were challenged by warm seawater conditions bringing more micro-jellyfish and higher plankton biomass to the area and causing increased mortality at some farms, while Iceland was impacted by increased salmon lice pressure which has continued to linger in Q4 2023.
“It’s fair to say the third quarter in Iceland did not live up to our expectations,” Vindheim said.
Historically, sea lice hasn’t been a problem in Iceland, but moving forward, Vindheim said Mowi will invest in improved lice strategy and treatment capacity for Arctic Fish. He said Icelandic bureaucracy around the de-licing treatment approvals must be streamlined so the right measures can be taken at the right time.
“Today, it takes far too long, and in our humble opinion, the decisions are not always the right ones either,” Vindheim said.
In light of these challenges, Mowi has reduced its 2023 Icelandic harvest volume guidance from 15,000 MT to 11,500 MT, and further to 10,000 MT next year.
Mowi Consumer Products, its downstream business, delivered a seasonally record-high quarter, with an operational EBIT of EUR 39.7 million (USD 42.3 million) and an operating revenue of EUR 876.2 million (USD 932.8 million). Some 59,490 MT of products were sold by the division in the quarter, as it capitalized on lower raw material prices. Vindheim said that despite a challenging economic environment, demand for salmon remained robust.
Mowi’s feed division also had a strong quarter, with sales totaling 168,945 MT and revenue reaching EUR 344 million (USD 366.2 million).
In regard to the Norwegian resource rent tax for salmon farming, which is applicable for the seawater phase of salmon farming and which will be retroactively applied from 1 January 2023, Mowi CFO Kristian Ellingsen estimated the rent tax rate at 10 percent for Mowi Norway across its value chain. He said Mowi has determined a significant portion of its earnings are not related to the seawater phase, and therefore not eligible to be taxed. However, Ellingsen said his determination was preliminary and still subject to some uncertainty.
Vindheim highlighted the fact that on 7 November 2023, Mowi was named the world's most sustainable producer of animal proteins by Coller FAIRR. This is the fifth consecutive year the company has topped the list, which ranks the 60 largest publicly-traded protein producers on a range of sustainability parameters.
“Sustainability is an important part of Mowi's DNA and is at the core of everything we do. This award once again shows that Mowi is at the forefront of sustainable food production,” Vindheim said.
Photo courtesy of Mowi
