March 11, 2019
BioMar meets 2018 expectations with strong revenue growth
In 2018, BioMar Group delivered on its growth aspirations with a strong increase in revenue as well as volumes, the company said.
While earnings did not keep up with the growth in volumes due to the competitive situation in the Norwegian market, other markets were able to compensate for the challenging situation BioMar found itself in.
With a result of DKK713 million (US$107 million), BioMar Group reached the high-end of the 2018 EBITDA guidance communicated in Q3 (DKK690-715 million; US$104-108 million).
Revenue grew 4% from DKK9,955 million in 2017 to DKK10,328 million in 2018, mainly derived from growth in volumes of 5%. Across geographies and species, BioMar experienced a very positive year, except in Norway where the company did not obtain sales contracts expected.
"It has been a challenging yet rewarding year. We have not fully been living up to our expectations, but I believe we have leapt forward and created a solid foundation for sustainable business at a truly global scale," Carlos Diaz, CEO of BioMar Group, said.
"Furthermore, we have during the last part of 2018 taken several initiatives to improve our competitive position in Norway through organisational changes and efficiency improvements, building upon our strong product portfolio within salmon. Having said this, we believe the actual competitive conditions in Norway are not sustainable in terms of profitability. For the time being, there is enough capacity in the market, but with the current market growth, there will, in the near future, be a need for new capacity investments. However, with the current return on invested capital in the market, it will be difficult to defend further investments."
During 2018, BioMar delivered proof of their ambitions to create sustainable growth as its business moved into new markets and species.
The company noted that the shrimp market in Ecuador welcomed the acquisition of Alimentsa which was described by BioMar as a "high-end shrimp feed producer."
"We continue to see possibilities for growth in Ecuador. That is why during 2018, we announced the investment in another line for pelletised feed as well as a line for extruded feed. The services and products we are delivering to the market position us as a preferred feed provider within the high-quality segment for shrimp feed in Latin Americas", Diaz explained.
He added that BioMar is "looking forward to a year with revenue at the same level as in 2018 but with increased earnings."
Diaz commented: "We expect to generate EBITDA in the range of 820-890 million from our consolidated companies of which approximately DKK130 million (US$20 million) will be derived from new IFRS16 accounting rules. At the same time, we continue our strategy of sustainable growth. I am looking forward to opening [BioMar's] second factory in China, preparing for the start-up in Australia and the inclusion of our third production line in Denmark."