Mowi sees signs of hope as Europe opens up
Mowi’s first-quarter profit was characterised by falling prices as a result of the Covid-19 shutdown in the markets. Now it predicts that demand will rise again.
The salmon farmer achieved an operating profit of €109 million in the first quarter of 2020, compared with €196m in the same quarter last year.
Mowi reported operating revenues and other revenues of €885m (Q1 2019: €979m) in Q1 2020. Total harvest volumes in the quarter of 83,119 tonnes (104,118) were in line with the quarterly forecast. The annual harvest volume for 2020 is unchanged at 450,000 tonnes.
Operational earnings before interest and tax (EBIT) per kilo for the company’s operations as a whole were €1.31 (1.88). For the regional results, see the table on the right.
Covid-19 hits results
In its quarterly report, Mowi points out that its operating results in the first quarter were strongly affected by falling prices due to the extensive global shutdown caused by Covid-19.
“Despite Covid-19 currently causing substantial market and logistical disruptions, our operations are running close to normal. At the same time, we are maintaining the safety and wellbeing of our employees. We will do whatever we can to keep operations running without compromising health and safety. I am extremely proud of all Mowi’s employees for making this possible,” said chief executive Ivan Vindheim.
Covid-19 significantly affected trading flows, logistics and distribution during the quarter. HoReCa (Hotel, Restaurant and Catering) was particularly affected by the measures taken to prevent the spread of the coronavirus. Lower demand in HoReCa was partially offset by increased grocery sales.
Record in feed
Although the first quarter was challenging, both Mowi Feed and Mowi Consumer Products produced record high volumes for the first quarter.
“Our integrated value chain has demonstrated resilience in these challenging times, and we have continued to produce value-added products at our many factories,” said Vindheim.
“We have been able to capitalise on long-term relationships with retailers globally, and have sold an increased share of production through retail.
Increased demand
“We have started to see easing of lockdown measures in some countries and signs of increased demand as a result. I strongly believe the demand for salmon will recover to pre Covid-19 levels as the foodservice segment gradually reopens as a result of this.”
As previously communicated in the company’s trading update on April 20, the board has decided to postpone the dividend decision for the first quarter to the second quarter in light of increased uncertainty due to Covid-19.
