Major improvement in Cermaq operating results in Q3
- The third quarter 2009 is a turning point for the Cermaq group. After a challenging 2008 and first half 2009, the overall operational results have improved significantly. I expect EWOS to continue at levels well above prior year performance and also a positive EBIT in the coming two quarters in the Chilean farming business, says Cermaq's CEO Geir Isaksen.
EWOS' EBIT pre fair value was NOK 197.8 million for the quarter (NOK 80.2 million). EWOS returned much improved EBIT in a challenging global market. Despite moderate volume and revenue reduction, EBIT margin increased significantly in the third quarter to 9.7 percent (3.8 percent). With record high volumes in Norway the timing of the new Florø feed plant proved to be successful and secured cost efficient and high quality production. All regions except for Chile enjoyed high capacity utilization in the quarter.
- EWOS achieved excellent results in the quarter, and the margin is re-established at a satisfactory level. I'm especially pleased that this result reflects also increased recognition of EWOS' total portfolio and improved market share, says Geir Isaksen.
Mainstream's EBIT pre fair value for the quarter was a profit of NOK 119.4 million (NOK 75.5 million). The improved profitability was primarily due to much better sales prices and margins achieved in Canada, Norway and also Scotland. Chile was loss making in the quarter. The geographical spread of Mainstream operations across four countries has worked well in recent quarters with higher revenues in Canada, Norway and Scotland compensating for the losses due to disease in Chile.
- Our portfolio approach, including exposure to the three species atlantic salmon, coho and trout in Chile, allows us to maintain reasonable levels of biomass while the rebuilding of Chile is undertaken in 2010 and 2011, says Geir Isaksen.
Rebuilding sustainable aquaculture in Chile is a key focus for Cermaq. Two sites have already been stocked with atlantic salmon in 2009, and Cermaq plans to transfer a total of approximately 2.8 million atlantic juveniles to sea during this year, increasing to 8 million in 2010. All the fish transferred are vaccinated against ISA, SRS and IPN diseases and are reared in onshore freshwater facilities. Biological performance of these fish is good so far. There is no guarantee the vaccines will fully mitigate the risk, though Cermaq remains hopeful that all appropriate precautions have been taken.
- It is vital to get remaining legislation regarding improved bio-security measures approved and implemented as quickly as possible. We can not risk that the improved sanitary situation, partly due to lower biomass, leads to reduced attention to the legal framework for rebuilding sustainable salmon farming in Chile, says Geir Isaksen.
The equity ratio increased to 50.0 percent at the end of the quarter, from 48.0 percent at second quarter end. The deconsolidation of Denofa reduced total assets and debt. The main factor for reduction of debt is operating cash flow from continuing operations. In addition to unused committed unused credit lines of NOK 568 million, Cermaq has other available short term credit lines of NOK 758 million.
