Tough salmon sector hits BioMar profits
Aquaculture feed manufacturer BioMar pointed to both lower fish volumes caused by non-optimal water temperatures and a continuous competitive situation in the salmon sector as it revealed lower-than-expected results for the first quarter of 2018, although it retained its share of the salmon feed market.
The company sold 223,000 tonnes of feed in Q1 2018, up on the 205,000 tonnes in the same period last year, but this was attributed to the contribution from the acquisition of shrimp feed supplier Alimentsa in Ecuador.
Revenue for the Danish company was down from DKK1.996 billion to DKK1.884bn, while earnings before interest and tax fell from DKK51.5 million to DKK35.2m.
BioMar blamed the revenue fall on exchange rate developments, the competitive landscape in the salmon markets and changes in product mix.
“We see the achieved market share in 2017 at the salmon markets and especially in Norway as a situation which the market will need to get used to,” said chief executive Carlos Diaz.
Competitive scenario
“It has been a tough competitive scenario with pressure on margins, but we expect it to improve during the year. In Q1 we concluded negotiations with key customers in UK and we are confident that 2018 will turn out to be another good year, where BioMar will push innovations to the market setting the agenda in the industry.”
The company has fared better in new markets. BioMar said innovative products brought to the markets combined with what it calls “anchored local agility” have enabled it to create a good foothold within Ecuador as well as Turkey and China.
“We believe in creating anchored local agility in our new business unit as well as for our existing units. The philosophy is to make sure the local units can impact the global centres of excellence and tap into the global innovation resources within raw materials, sustainability, nutrition and health; at the same time being agile in the cooperation with the customers,” said Diaz. “We expect to continue delivering solid results from the new business units in Ecuador and Turkey, and we will carry on building our position in China together with Tongwei Group.”
He continued: “We have confidence that 2018 is going to be another good year, including our traditional markets comprised by our salmon division and EMEA (Europe, the Middle East and Africa) division.”
