Marine Harvest restructures Chile operations after losses
Marine Harvest is restructuring its Chile operations after the significant losses it experienced during this spring’s algae bloom.
The company reported a negative impact on the company’s first quarter 2016 earnings as it wrote down USD 16 million (EUR 14 million) of fixed assets in Marine Harvest Chile. In addition, Marine Harvest will make a restructuring provision of USD 3 million (EUR 2.6 million) in the second quarter related to employee layoffs – Marine Harvest was recently forced to reduce its workforce by up to 500 employees due to the algae bloom and poor results over the last year.
“The algal bloom in Chile has caused severe problems for the whole industry in Chile, including Marine Harvest. Accordingly, Marine Harvest has initiated a restructuring process to cut costs and become more competitive,” the company said in a statement.
Even though Marine Harvest’s quarterly earnings were negatively impacted in Chile, the global seafood supplier had record first quarter operational revenues of EUR 810 million (USD 925.5 million), a 10 percent jump, in the first quarter of 2016.
“Driven by record-high prices in Europe and Asia, and improving markets in the Americas, this is one of our strongest quarters ever,” said Marine Harvest CEO Alf-Helge Aarskog. “I am also pleased to see a reduction of the production costs in Canada, and the good contribution from Region North and Region West in Norway.”
The restructuring of its Chilean operations will provide ongoing savings for the company.
“These measures are expected to provide annual savings of approximately USD 8 to 10 million (EUR 7 to 8.6 million),” Marine Harvest said.
The seafood supplier said in response to the algae crisis in Chile, it would advocate for stronger regulations of the fish-farming industry in that country, and would push for continued consolidation in the sector.
”This should enable the transformation of Chilean fish farming into a sustainable industry with improved biology, sound financial results and safe jobs,” Aarskog said.
Marine Harvest's operational EBIT was also negatively impacted by losses at its Rosyth salmon processing plant in Scotland. However, the company has taken actions to improve efficiency and yield, Aarskog said.