Poor quarter for Cermaq

Christian Pérez

  Norway Market According to a trading update for Cermaq, Russian sanctions have led to reduced prices, especially for smaller fish.

Volume New "green licences" and the recent biomass increases give room for postponed harvesting, which is reflected in the harvesting strategy for Q3.  In addition, high water temperatures in Nordland throughout the summer have led to somewhat lower growth than planned, also affecting harvesting volumes. For the third quarter sales volumes in Norway are expected to be down 4 kT relative to previous estimates. For the full year the estimated sales volume from Norway has been reduced, with 6 kT relative to the previous estimate. The expected biomass transferred to 2015 is, however, expected to be 3.5kT higher than originally planned due to the new green licences acquired by Cermaq.

Fish health The fish health situation is generally good, both in Nordland and Finnmark. Compared to other regions in Norway, the sea lice situation is favourable. No virulent strains of ISA have been detected in the remaining pens at Langøyhovden.

Chile Market The lack of market access for Norwegian and Canadian salmon into Russia has had a positive price effect for the Chilean salmon industry and for Cermaq. This effect seems to be limited overall, as the demand from Russia for Chilean products has cooled down after an initial hectic period. The reason for this is believed to be lack of alignment on credit terms. Prices for trout continue to be strong, and early indications for the coming Coho season are positive.

Volume Increased productivity for Atlantic salmon is countered by loss of large fish due to the bacterial disease salmon rickettsia syndrome (SRS). A similar effect is seen for trout, and for both species the SRS has negative effect on quality resulting in reduced volume of premium grade. The Coho volumes develop well and are somewhat increased relative to last year. For Q3, total sales volumes are expected to be 1 kT higher than previous estimates, but no change is expected for the full year.

Fish health The Caligus situation in Chile continues to improve, both for Cermaq and for the industry in general, and important parameters such as smolt yield and average harvest weight are continuously improving. Also the feed conversion ratio is significantly improved compared to the same period last year. SRS continues, however, to be the most important challenge to fish health and production cost for Atlantics and trout. In addition, required treatment of SRS explains a continued high consumption of antibiotics for these species. The SRS situation is not only affecting cost, but also gives reduced fish health quality and lower price realization for Atlantics and trout. Coho is developing well and according to plan.

Canada  Market The effects from the new situation in Russia have also been felt in the traditional markets in North America, and prices are reduced so far in Q3.  More offers of Norwegian salmon have been observed, along with a seasonal competition from a rich wild catch season.

Volume Reduced appetite in the last two quarters has resulted in lower harvest volumes than originally planned. Harvest of Millar site with significant mortality has also contributed to reduced sales volume in the quarter and for the full year. The Q3 sales volume is expected to be down 1kT compared to the previous estimate. For the full year, the sales volume has been reduced by 1kT relative to the last estimate.

Fish health The fish health situation in Canada is generally good after a long period of reduced appetite. Still, there has been an issue with the Millar site at this quarter. Initially the fish at this site were affected by some form of toxin from algae, resulting in elevated mortality. The surviving fish recovered reasonably well, but were later victims of an algal bloom that was not handled adequately, resulting in high mortality. The site will be harvested before the end of Q3, and the net EBIT effect of the Millar incidents is estimated to be minus CAD 3.8 million in Q3.