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The Chilean salmon producer Australis Seafoods appears to be on the verge of collapse, with low prices and high costs leading to its shares plummeting 66.3% in 2015 and a further 36.3% so far this year.

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This makes them not only the worst performing producer in Chile, but also the worst performing listed salmon producer worldwide. Its market value has fallen to US$ 36.5 million and in the first weeks of January the company lost more than a third of the value with which closed 2015, El Mercurio reports.

Since its IPO, in June 2011, it share price has consistently decreased, from CLP$ 180.98 (US$ 0.25) in its debut, down to CLP$ 7.5 (US$ 0.01) today. Five years ago there were brokerage analysts covering the company and forecasting a target price of CLP$ 220. Today, there are no analysts following the stock performance of Australis, nor the other companies in the Chilean salmon industry. However, financial sources explained that Australis has suffered even more than its fellow Chilean producers because their shares have less liquidity than those from AquaChile or Multiexport Foods, for example. In fact, the latter is the only Chilean salmon producing company with a positive variation in the stock market during the first weeks of 2016.

All the consecutive capital increases that the firm has subscribed in recent years, have been almost entirely paid by its owner, while shares available on the market to trade have fallen from 13 per cent of the property down to less than 8 per cent. That means the controller - Chilean businessman Isidoro Quiroga - has reinvested from his pocket a total of US$ 145 million in capital increases to shore up his company in the past three years.

In addition, the company has attempted major restructuring, such as changing his entire executive staff in 2013, leaving the production of trout and selling its eggs manufacturing subsidiary Landcatch, in order to focus its business purely in the sale of salmon.

But no strategy has helped to stop the crash. In its IPO, in June 2011, Australis had a market capitalization of US$ 557.9 million. Today, it is 93.4 per cent less.

 

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