BioMar Group has reported financial performance for 2018 which shows that earnings did not keep up with the growth in volumes due to the competitive situation in the Norwegian market. The other markets were able to compensate for the challenging situation.
“It has been a challenging yet rewarding year. We have not fully been living up to our expectations, but I believe we have leapt forward and created a solid foundation for sustainable business at a truly global scale. Furthermore, we have taken several initiatives during the last part of 2018 to improve our competitive position in Norway through organizational changes and efficiency improvements, building upon our strong product portfolio within salmon. Having said this, we believe the actual competitive conditions in Norway are not sustainable in terms of profitability. For the time being, there is enough capacity in the market, but with the current market growth there will be a need for new capacity investments in the near future. However, with the current return on invested capital in the market, it will be difficult to defend further investments,” explains Carlos Diaz, CEO BioMar Group.
During 2018, BioMar proved their ambitions to create sustainable growth by moving into new markets and species, especially the shrimp market in Ecuador which has welcomed the acquisition of Alimentsa which embraces the new product’s concepts and services.
“We continue to see possibilities for growth in Ecuador. That is why during 2018 we announced the investment in another line for pelletized feed as well as a line for extruded feed. The services and products that we are delivering to the market position us as a preferred feed provider within the high-quality segment for shrimp feed in Latin America,” states Carlos Diaz.
The new companies in China and Turkey have both experienced a year with increased volumes and earnings, despite a delay in the start-up of Wuxi factory.
BioMar is looking forward to a year with revenue at the same level as in 2018 but with increased earnings. “We expect to generate EBITDA in the range of 820-890 million from our consolidated companies of which approx. 130 million DKK will be derived from new IFRS16 accounting rules. At the same time we continue our strategy of sustainable growth, I am looking forward to opening the second factory in China, preparing for the start-up in Australia and the inclusion of our third production line in Denmark,” concludes Carlos Diaz.