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Salmones Multiexport estimates that the recent Harmful Algal Blooms (HABs) that affected five of their farms will lead to losses of US $26.6 million-worth of salmon.

The salmon producing company said that HABs impacted its production of Atlantic salmon in the farming sites ‘Llingua' and 'Huyar', located in the region of Los Lagos; and 'Broken', 'Italiano' and 'Victoria', located in the region of Aysén since late January and until February 2016.

Multiexport commented that these five sites have insurance policies specifically including algae blooms. Such policies covers biomass losses, depending on their book value at the time of the incident, with individual deductibles per site between 8 per cent and 20 per cent, plus an annual aggregate deductible of US$ 2.5 million for the entire company.

The general manager of Multiexport Foods, Andrés Lyon, explained that his company has completed the tasks of removal and disposal of all mortalities as well as moving and counting fish in those farms affected, returning operation of these sites to a condition of normalcy.

The company calculates that aggregate losses of biomass in the affected farms - at that time containing fish between 0.9 and 4.3 kg average weight - is of 5,203 tonnes of Atlantic salmon, equivalent to 45 per cent of the total biomass of these farms, which corresponds to a total cost of US$ 26.6 million.

The total estimated direct loss of biomass which will be recognized in the financial statements of 2016 is of US$ 9.0 million, equivalent to the amounts corresponding to estimations after those deductibles explained above. In addition, there is a policy deductible for mortality and mitigation extraction costs, which is estimated to be of US$ 0.4 million.

The company estimates that the incidents will lead to a reduction in their harvests of approximately 6 per cent in 2016.