February 12, 2014

Cermaq posts strong profit growth in Q4 2013

In fourth quarter 2013, Cermaq's pro forma earnings before interests and taxes (EBIT) pre fair value and non-recurring items was NOK214 million (US$35 million) versus a loss of NOK173 million (US$28 million) in fourth quarter 2012.

The improvement is largely coming from higher salmon prices which have lifted earnings in all farming regions. Chile delivered an EBIT of NOK86 million (US$14 million) after six consecutive quarters of losses.

In the fourth quarter, pro forma operating revenues were NOK1.7 billion (US$277 million) versus NOK1.2 billion (US$195.5 million) in the same quarter last year.

Volumes sold in fourth quarter were 42,700 tonnes, a decrease of 4,000 tonnes versus the same quarter last year, but some 2,000 tonnes above the previously communicated estimate. The farming operations reported an EBIT pre fair value and non-recurring items of NOK248 million (US$40 million), versus a loss of NOK146 million (US$24 million) in the previous year, an improvement of NOK394 million (US$64 million).

"This is an acceptable quarter where a strong market has helped improve the performance in all regions", chief executive officer Jon Hindar said. Norway and Canada presented good results, and so did the Coho specie in Chile. Atlantics and trout in Chile are still weak, but both species produced positive earnings and good improvement in margins compared to third quarter 2013 as well as fourth quarter 2012.

In Chile the earnings in fourth quarter improved significantly versus the previous year with EBIT pre fair value and non-recurring items at NOK86 million (US$14 million) compared to a loss of NOK132 million (US$21.5 million) EBIT for the same quarter last year. Volumes sold increased from 24,600 tonnes to 25,900 tonnes.

The biology in Chile has improved in several areas, especially related to the sea lice level, while antibiotics usage continues to be somewhat high due to SRS, however low compared to the Chilean industry average. The development in sea lice levels is encouraging since fourth quarter seasonally is more challenging from a biological perspective due to higher sea water temperatures.

Cermaq paid a record extraordinary dividend of NOK51 (US$8.31) per share in January 2014 based on the sale of EWOS. The Board of Directors will in addition propose an ordinary dividend for 2013 of NOK1.80 (US$0.30) per share, equivalent to 42% of the adjusted net result for the continuing operations.