February 15, 2008

Norway's Cermaq reports Q4 loss

Low salmon prices and a series of negative factors in the fourth quarter of 2007 have resulted in a distinct drop in earnings for Cermaq.

Cermaq has reported a fourth quarter EBIT (Earnings Before Interests and Taxes) value of US$21.2 million, compared to US$64.7 million in Q4 2006. Initial figures for the entire 2007 show an EBIT of US$138.3 million.

Cermaq CEO Geir Isaksen said that salmon prices in the fourth quarter were lower than in 2006, which brought in less revenue for the company.

Cermaq's fish farming extension Mainstream Group, reported a fourth quarter EBIT value of US$2 million, compared to US$46.5 million in the same period in 2006.

Average salmon prices were 24 percent lower than in the fourth quarter of 2006, and costs per kilogram were also higher due to higher feed costs and particular fish health and production conditions in Chile.

Cermaq's earnings were also negatively affected by a combination of factors, which include delayed harvesting, slow sales, high production and feed costs, high mortality rate, as well as a cage collapse in Scotland.

However, Cermaq's fish feed extension EWOS Group has achieved an EBIT value of US$19.8 million in the fourth quarter of 2007, compared to US$18.1 in the same period in 2006.

Cermaq's net interest bearing debt has increased by US$22.4 million to US$232.5 million, primarily due to the acquisition of Artic Seafood at the end of fourth quarter.