May 12, 2008

Cermaq loses US$7 million in Q1 
 

Norwegian aquaculture company Cermaq has suffered a first quarter loss of NKR 36.9 million (US$7.2 million) due to lower salmon prices and high production costs.

The company's first quarter EBIT pre fair value is -NKR 10.6 million (-US$2 million).

Salmon prices were lower in all markets in the first quarter and production costs in Chile have become high due to disease and slower growth, according to CEO Geir Isaksen.

Isaksen said the company's highest priority is to improve production conditions in the region and that while EWOS volume development was satisfactory in a challenging market, raw material costs had reduced EBIT.

Cermaq's Mainstream Group reported a first quarter EBIT pre fair value loss of -NKR 15.9 million (US$3.1 million) compared to a profit of NKR 181.4 million (US$35.6 million) in the first quarter of 2007.

Mainstream Chile was affected by reduced average prices for Atlantic salmon due to low harvest weights. Work to introduce measures for the improvement of sanitary conditions in Chile is currently underway.

The first quarter results have been much weaker than the company had expected, said Isaksen. However, he said the company is confident in solving the sanitary issues in Chile and taking the industry back to a profitable level.

"It will take time, but Cermaq has a solid base in both feed production and fish farming and has strong and goal orientated research and development operations. Based on this I have strong confidence in the future success of the company," said Isaksen.