Cermaq presents solid Q1 results; EWOS first quarter feed sales show 40% increase

Despite low salmon prices Cermaq reported an EBIT pre fair value of NOK 101 million and a return on capital employed of 16.6 percent. EWOS increased its volumes by 40 percent compared with last year, resulting in an EBIT of NOK 62 million. Good performance in Chile was the main contributor to an EBIT pre fair value for Mainstream of NOK 60 million.

May 10, 2012

EWOS sold 230 thousand tonnes of aquafeed, an increase of 66 thousand tonnes, or 40 percent, compared to first quarter 2011. The organic growth was 33 percent. Higher volumes came primarily from a 47 percent and 30 percent growth in Norway and Chile respectively.

The Cermaq company reported an EBIT pre fair value of NOK 62 million and an EBIT margin of 3.3 percent in first quarter 2012.

"EWOS is presenting good results from an exceptionally strong market growth in Norway and Chile", concluded Jon Hindar, Cermaq CEO.

Cermaq reported an EBIT pre fair value for first quarter of NOK 101 million (NOK 403 million). The reduction is mainly explained by significantly lower salmon prices compared to last year.

"I am pleased with the solid results Cermaq presents in a challenging market situation, again confirming the strengths of our strategy of operating a global leading feed company combined with a strong and diversified farming business", said Hindar.

Mainstream Chile reported an EBIT pre fair value of NOK 49 million (NOK 160 million). EBIT pre fair value per kilogram, gutted weight, was NOK 3.7 (NOK 11.1). The reduction was due to lower sales prices for all species, particularly for Atlantic salmon. The biological performance is generally good, but with seasonally higher sea lice levels in certain sites.

Mainstream Norway reported an EBIT pre fair value of NOK 12 million (NOK 154 million). EBIT pre fair value per kilogram, gutted weight, was NOK 1.2 (NOK 16.4). The EBIT per kilogram for Nordland and Finnmark was NOK 3.1 (NOK 16.7) and NOK 0.2 (NOK 16.2), respectively. Volumes sold were 10.4 thousand tonnes, 11 percent above first quarter last year. An average price per kilogram of NOK 25.7 compared to NOK 38.3 last year is the main reason for the reduced results in Mainstream Norway. Higher production cost at some sites in Finnmark and still some additional cost from the upgraded Hammerfest processing plant also impacts the operating results. The processing plant’s performance is however improving, with expected normalized operation by the end of second quarter 2012.

Mainstream Canada reported a negative EBIT pre fair value of NOK 1.6 million in the quarter (profit of NOK 26.3 million). EBIT pre fair value per kilogram, gutted weight, was negative NOK 0.6 (positive NOK 9.4). The reduction in profit was mainly driven by lower prices in the US market. Good biological performance and certain cost reduction programmes have positively impacted production cost in the quarter.

"We experience overall good operational performance in our farming business even though the lower salmon prices have significant impact on the results. Mainstream has introduced several cost efficiency activities that together with continuous focus on preventive fish health will support solid performance also going forward", stated Hindar.

Outlook. Mainstream expects to harvest 125 thousand tonnes of salmonids in 2012 compared to 109 thousand tonnes in 2011, an increase of approximately 15 percent. EWOS expects the market growth in Chile and Norway for 2012 to be above 20 percent and above 10 percent respectively.