November 13, 2013

In the third quarter of 2013, Cermaq's pro forma earnings before interests and taxes (EBIT) pre fair value was NOK113 million (US$18.3 million) versus a loss of NOK97 million (US$15.7 million) on-year, primarily due to higher salmon prices which have lifted earnings in all farming regions.

Cermaq expects to increase its sales volume by 14% in 2014, half of this increase will be in Norway and Canada. Its pro forma financials for third quarter 2013 showed operating revenues of NOK1.1 billion (US$178 million) versus NOK0.7 billion (US$113 million) in the same quarter last year, and an EBIT pre fair value and non-recurring items of NOK113 million (US$18.3 million) versus a loss of NOK97 million (US$15.7 million) the previous year. These numbers are not including EWOS which is classified as discontinued operations in the quarter. The sale of Cermaq's shares in Copeinca resulted in a gain of NOK114 million (US$18 million) in the quarter, classified as financial income.

"We have had a strong focus on the processes related to the closing of the EWOS sale during third quarter. I am very pleased that this complex transaction has been closed according to plan", says CEO Jon Hindar in a comment. 

Volumes sold in third quarter were 27,900 tonnes, an increase of 3,400 tonnes versus same quarter last year, but some 3,000 tonnes lower than estimate. Mainstream reported an EBIT pre fair value and non-recurring items of NOK144 million (US$23 million), versus a loss of NOK73 million (US$12 million) the previous year, an improvement of NOK217 million (US$35 million).

"This is an acceptable quarter where a strong market has helped improve results in all regions. Profitability in Chile is still too weak, but both operations and earnings at the end of the quarter showed a positive development," Jon Hindar continues. 

Mainstream Canada reported an EBIT pre fair value and non-recurring items of NOK43 million (US$7 million), an improvement from a loss of NOK26 million (US$4.2 million) the previous year, even though volumes sold declined from 5,600 tonnes to 4,400 tonnes. EBIT per kilogramme was NOK9.6 (US$1.55). Good prices in the North American market and the Infectious Haematopoietic Necrosis (IHN) outbreak last year are the main factors behind the improved result.

Mainstream Chile's earnings in third quarter improved significantly versus last year with EBIT pre fair value at break-even level, and the Chilean operation also saw an earnings improvement towards the end of the quarter. EBIT for the same quarter last year was a loss of NOK57 million (US$9.2 million). Volumes sold increased from 7,000 tonnes to 10,600 tonnes. EBIT per kilogramme for Coho was NOK4.6 (US$0.74), while the EBIT margins for Atlantics and trout were slightly negative.

Mainstream Norway delivered an EBIT pre fair value of NOK8 (US$1.30) per kilogramme versus NOK0.8 (US$0.13) last year, and volumes sold of 12,800 tonnes which is 900 tonnes more than last year. EBIT for Nordland was NOK9.7 (US$1.60) per kilogramme and NOK5.7 (US$0.92) per kilogramme for Finnmark. Mainstream Norway sold approximately 20% of its volume on fixed price contracts which had a negative impact of around NOK1 (US$0.16) per kilogramme.