Forth quarter results from Lighthouse
According to Lighthouse Caledonia’s report for the fourth quarter of 2008, high cost base, low prices and inefficient VAP production affected operational results. But biological performance in younger generations of fish, and improved margins experienced at the beginning of 2009, are believed to be positive for future cash flow generation, the Scottish salmon farming company said.
The remaining part of the lice affected stock from Loch Roag sites was harvested in the quarter, representing 46 per cent of total harvest volume in the period and affected results negatively. At the same time it marked an end to the high cost of fish harvest from these sites. The total harvest in the quarter was 3,332 tonnes gutted weight (6,699) and 19,367 tonnes for the full year (22,682). The biomass planned to be harvested in 2009 and onwards continues to show good biological performance. Harvest expectations are for 23,500 tonnes gwt in 2009, 22,000 tonnes gwt in 2010 and 23,500 in 2011.
Operating revenues in the quarter were GBP 10.5m (18.2) and GBP 51.9m (62.1) for the full year 2008. The decrease in both periods relates to lower harvest volumes, as well as reflecting the prices achieved in 2008. EBITDA before fair value adjustment of biomass for the quarter was GBP -2.0m (-0.7) and GBP 0.2m (5.5) for the full year. EBIT after fair value adjustment of biomass for the quarter was GBP -2.5m (0.4) and for the full year GBP -4.3m (-1.0).
The operating results were affected by lower revenue, higher cost of the fish harvested and increased feed and logistical costs, compared with 2007. In addition, 2008 results reflected full year restructuring costs of GBP 1.4m and negative contribution from the VAP segment of GBP 3.9m. There are no remaining costs related to restructuring and close down of VAP in 2009. This unit was closed in December and reduced the number of employees by 110, down to 215 by 1 February 2009.
During the quarter the financing situation worsened due to high costs, low harvest volumes and a heavy debt level. By the middle of December the company's equity and liquidity did not represent a viable financial basis for continued operations. Consequently the shares of the company were requested to be suspended from trading on 16 December pending a solution to the financial challenges. Such a solution was reached when a group of creditors, existing shareholders and new investors - based on the company's assets, positive biological development and margin outlook - committed to a financial restructuring plan to solidify the company. With reference to material posted to Oslo Axess and on the company's website, this solution has been proposed by the Board of Directors to an extraordinary general meeting of Lighthouse Caledonia ASA on 3 March 2009.
The financial restructuring consists of a minimum NOK 150m equity issue, sale of assets and biomass, an agreement with the main lender regarding a refinancing of the long term debt and an agreement with a major creditor regarding conversion of accrued short term debt into long term debt and write down of short term debt. All elements except sale of assets contingent on the equity issue.
