Calling the first six months of 2021 an “obstacle,” an executive with Santiago, Chile-based salmon farmer Camanchaca insisted the company remains committed to its plan to reach 70,000 metric tons (MT) in annual harvest.
Camanchaca Vice Chair Ricardo García did not specify when the company expects to reach its 70,000 MT target, but the firm's harvest for the full year 2021 is estimated in the 42,000 to 43,000 MT whole-fish equivalent (WFE) range, coho included, according to a statement accompanying its Q2 results presentation. During the quarter, the company harvested a total of 6,425 MT of Atlantic salmon with an average weight of 3.9 kilograms WFE, Camanchaca reported previously, representing a 39.8 percent drop year-over-year when compared to the 10,670 MT harvested in Q2 of 2020.
Two algae bloom incidents at its operations in Reñihue fjord and Comau fjord, and the resulting mortalities, took a heavy toll and diminished the company’s existing harvest capacity and sales volume, García said, thereby affecting financial results, which he called “very poor.” During the first half of the year, net losses reached USD 23.6 million (EUR 20 million), diving 62.2 percent further into the red from the same period of 2020. Operating revenue dipped 10.5 percent to USD 120 million (EUR 102 million), and the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) was negative at a USD 18 million (EUR 15 million) loss, versus a positive EBITDA of USD 9.3 million (EUR 7.9 million) during the first six months of last year.
However, García said Camanchaca learned its lessons from the events and expects cost improvements to be seen as of August, with full normalization in 2022. He pointed to favorable market conditions, including increased demand at high prices (up 12 percent year-over-year), as well as the firm taking “a more cautious approach to fjords” with better capacity to adjust to environmental changes, increased operations in Chile's Region XI, and a higher focus on coho salmon, which are harvested before summer, as reasons to be optimistic.
“Consequently, the fundamentals of this business remain unchanged," he said. "This strategic refinement will be in parallel to numerous operational improvements which will bring new technologies adapted and best practices in farming, processing and marketing. These first six months of 2021 have been an obvious obstacle, but they haven’t changed our long-term goals."
During the second quarter alone, operating revenue amounted to USD 51 million (EUR 43 million), flat compared to USD 50 million (EUR 42 million) in Q2 2020, while harvest costs for the quarter reached USD 4.92 (EUR 4.17) per kilogram live fish, jumping 48 percent higher compared to the same period in the previous year. EBITDA for the quarter represented a loss of USD 10.6 million (EUR 9 million), compared to a loss of USD 5.8 million (EUR 4.9 million) in Q2 2020. The company largely attributed the lower margins and increased costs to the algae bloom mortalities, with extraordinary losses of USD 3.1 million (EUR 2.6 million) in Q2.
Previously, Salmones Camanchaca closed Q1 with a negative 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.
Photo courtesy of Camanchaca
