Morpol breaks even
Morpol ASA reported a break even EBIT result for the third quarter 2010. This includes one off exceptional costs related to acquisitions, totaling EUR 2.6 million, which means that the operational EBIT was EUR 2.6 million in the quarter. The EBIT in the corresponding quarter last year was EUR 2.9 million.
Though raw material prices of salmon dropped from the levels in the second quarter, they still remained significantly higher than prior year and impacted on the processing margins. The Morpol Group had a net profit of EUR 0.9 in the quarter (EUR 3.9 million).
Operating revenues in third quarter 2010 were well above prior year at EUR 93.3 million (EUR 67.7 million). The revenue increase was due to a combination of strong volume growth and higher sales prices.
Total sales volume grew by 23 percent compared to third quarter 2009. There was a good volume development versus 2009 in all categories with the exception of Cold smoked salmon and Specialities.
"We had satisfactory results in the third quarter of 2010 despite the challenge of high raw material costs. We have realised our strategic goal to enter into salmon farming, and we have also acquired a processor in UK. This will help us increase the market share in selected markets", says CEO Jerzy Malek.
During the quarter, Morpol has acquired Mainstream Scotland (now Northern Isles Salmon), Marine Farms, Brookside Products Ltd. and assets of Westray Salmon Ltd. and Rysa Salmon Ltd. Northern Isles Salmon is included in the consolidated income statement as from 1 August 2010. The other acquired companies will not be included in the income statement until the fourth quarter. All acquired companies are included in the Group's balance sheet at third quarter end.
"Though margins in the third quarter are lower than we would like, we are confident that our business model will allow us to recover strongly in the coming period and we expect to see an improved performance in the fourth quarter and into 2011", comments Jerzy Malek. "Our focus remains on producing stable, good quality products designed to satisfy customer needs".
Morpol had a net interesting bearing debt (NIBD) of EUR 156 million at the end of third quarter, compared to EUR 75.5 million at the end of third quarter last year. The increase is due to the acquisitions in the quarter.
