Still heavy losses in Chile for Cermaq
- Despite the heavy losses in Chile I believe the results are positive in the sense that the balance sheet is significantly improved, our equity ratio is increasing and we have activities in place in Chile to address the severe situation which will continue beyond 2009, says CEO Geir Isaksen.
The Mainstream group reported a first quarter EBIT pre fair value loss of NOK 89.3 million compared to a loss of NOK 15.9 million in Q1 2008. The result was heavily impacted by ISA cost in Chile including exceptional costs of NOK 84 million related to ISA and costs of 20.2 million related to algae bloom. Volumes increased by 31.1 percent due to higher sales volumes in Chile and in Canada. Canada improved significantly from quarter 1 2008, not only from higher volumes but also from the favorable prices in the US market. Norway experienced reduced volumes and results, mainly due to PD-problems in Finnmark, whereas Nordland reported strong results. In the second quarter all harvest in Norway will come from Nordland. Mainstream Scotland reported an EBIT pre fair value loss of NOK 12.1 million in the quarter, including NOK 4.7 million of exceptional costs from sanitary problems at Shetland.
Overall global supply is expected to drop by more than 6 percent in 2009, and thus market prices are expected to remain strong.
Cermaq plans to transfer atlantic smolts from June. All atlantic smolts have been produced in land based facilities and will all be vaccinated against ISA. Decisions on transfer will be based on a continuous monitoring of the biological conditions.
- The development in Chile is still uncertain. Nevertheless, the results from Chile in the quarter are as anticipated and I expect a gradual improvement in the Chilean health situation. The signs are very positive for salmon prices for the next years, and Canada and Norway are well positioned to benefit from this, says Geir Isaksen.
The EWOS group achieved an EBIT pre fair value of NOK 6.8 million in Q1 2009, compared to NOK 1.2 million in Q1 2008. Volumes decreased 34 percent in the quarter, mainly due to significantly lower volumes in Chile. The reduction is explained by reduced total market and lower market share to lessen receivables risk. Margins improved following a drop in raw material prices. The result included a NOK 5.2 million provision for receivables in Chile.
- EWOS has delivered a satisfactory result, says Geir Isaksen.
Structural improvements in the balance sheet strengthened the equity ratio to 46.1 percent. Net interest bearing debt was reduced by NOK 100 million in the quarter, mainly due to reduced inventories in the farming business, reduced receivables within the feed business and positive foreign exchange impacts.
