Cermaq ASA: Strong market drives earnings improvement
Cermaq's pro forma EBIT pre fair value was NOK 113 million in third quarter
2013 versus a loss of NOK 97 million in third quarter 2012. The improvement is
primarily due to higher salmon prices which have lifted earnings in all
farming regions. Cermaq expects to increase its sales volume by 14% in 2014,
half of this increase will be in Norway and Canada.
Cermaq's pro forma financials for third quarter 2013 showed operating revenues
of NOK 1.1 billion versus NOK 0.7 billion in the same quarter last year, and
an EBIT pre fair value and non-recurring items of NOK 113 million versus a
loss of NOK 97 million the previous year. These numbers are not including EWOS
which is classified as discontinued operations in the quarter. The sale of
Cermaq's shares in Copeinca resulted in a gain of NOK 114 million in the
quarter, classified as financial income.
- We have had a strong focus on the processes related to the closing of the
EWOS sale during third quarter. I am very pleased that this complex
transaction has been closed according to plan, says CEO Jon Hindar in a
Volumes sold in third quarter were 27,900 tons, an increase of 3,400 tons
versus same quarter last year, but some 3,000 tons lower than estimate.
Mainstream reported an EBIT pre fair value and non-recurring items of NOK 144
million, versus a loss of NOK 73 million the previous year, an improvement of
NOK 217 million.
- This is an acceptable quarter where a strong market has helped improve
results in all regions. Profitability in Chile is still too weak, but both
operations and earnings at the end of the quarter showed a positive
development, Jon Hindar continues.
Mainstream Canada reported an EBIT pre fair value and non-recurring items of
NOK 43 million, an improvement from a loss of NOK 26 million the previous
year, even though volumes sold declined from 5,600 tons to 4,400 tons. EBIT
per kilo was 9.6 NOK. Good prices in the North American market and the IHN
outbreak last year are the main factors behind the improved result.
Mainstream Chile's earnings in third quarter improved significantly versus
last year with EBIT pre fair value at break-even level, and the Chilean
operation also saw an earnings improvement towards the end of the quarter.
EBIT for the same quarter last year was a loss of NOK 57 million. Volumes sold
increased from 7,000 tons to 10,600 tons. EBIT per kg for Coho was NOK 4.6,
while the EBIT margins for Atlantics and trout were slightly negative.
The biology in Chile has improved in several areas, especially for the sea
lice level, while antibiotics usage continues to be somewhat high due to SRS.
- The current market balance and Mainstream's production plans indicate a good
Coho season, and we also see strong demand from new markets such as Brazil and
Russia, Jon Hindar concludes.
Mainstream Norway delivered an EBIT pre fair value of NOK 8 per kg versus NOK
0.8 last year, and volumes sold of 12,800 tons which is 900 tons more than
last year. EBIT for Nordland was NOK 9.7 per kg and NOK 5.7 per kg for
Finnmark. The PD outbreak in July had a negative EBIT impact of NOK 25 million
for the Finnmark operation. Mainstream Norway sold approximately 20 percent of
its volume on fixed price contracts which had a negative impact of around NOK
1 per kg.
Cermaq expects 20,000 tons, or 14 percent, increased sales volume in 2014
compared to 2013. Half of this increase will be in Norway and Canada. Volumes
sold in Canada will revert back to a normal level after the IHN outbreak in
2012. The increase in Norway is driven by better capacity utilization in
Finnmark and rebuilding of volumes after the PD outbreak. The growth in Chile
is primarily a consequence of the reallocation of capacity towards Atantics
from trout after the acquisition of CMC in 2012.
Further information - please contact:
Jon Hindar, CEO, phone: + 47 23 68 50 10, mobile: +47977 48 829
Tore Valderhaug, CFO, phone: + 47 23 68 50 38, mobile: +47995 60 925
About Cermaq - Cermaq is one of the world's leading companies in farming of
salmon and trout, with operations in Norway, Chile and Canada. In 2012 the
farming business had sales of around NOK 3.3 billion, and a total harvested
volume of 120,000 tonnes. Cermaq's feed business unit EWOS was sold in 2013..
Cermaq is listed on the Oslo stock exchange with ticker code CEQ.
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
3rd Quarter 2013
Result presentation Q3 2013
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information contained therein.
Source: Cermaq ASA via Thomson Reuters ONE
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