February 11, 2010

Marine Harvest lifts hopes for seafood demand

Marine Harvest shares jumped 5% after the fish group revealed that Europeans' growing taste for smoked salmon had helped it to a forecast-beating end to 2009, and predicted strong seafood markets in 2010.

The year had already started with price increases and good growth in sales volumes, after a 2009 in which global demand for salmon was boosted by the appearance of China as a major consumer, with market growth of 63%.

Marine Harvest CEO Aase Aulie Michelet said the forecast continued solid demand for seafood, coupled with limited supply, a strong market for salmon is indicated in 2010.

Seafood futures markets were pricing in tight conditions into 2011, the group added.

The comments follows October-to-December quarter in which the company's underlying operating profits were, at NOK569 million, 79% higher than a year before, and well above analysts' forecasts of a NOK412 million result.

The jump reflected in the main an improvement in Chile, historically the world's second-biggest salmon-producing country, where fish farms have been forced to destock, culling even young fish, following an outbreak of infectious salmon anaemia (ISA).

Marine Harvest's Chilean division bounced NOK138 million into the black, from a NOK216 million operating loss a year before, thanks to the favourable market prices encouraged by Chile's salmon crisis.

Survival rates among the division's remaining salmon of the disease-hit 2008 vintage had also been higher than expected.

However, the group also flagged a growing appetite among Europeans for smoked salmon as a Boxing Day treat.

"Sales of smoked salmon have historically been very good in the weeks prior to Christmas, but this year, high demand continued into the week between Christmas and New Year," the group said.

The rising demand for smoked salmon and elaborated fish products helped operating profits at the group's European processing division jump 57% to NOK110 million.

Group earnings came in NOK520.1 million, compared with an after tax loss of NOK621.1 million a year before.

Marine Harvest also proposed a NOK0.35 a share dividend, higher than the NOK0.25 previously signalled.