August 31, 2020

Operational EBIT of US$117.8 million in second quarter for Mowi

Mowi achieved an operational EBIT of €99 million (US$117.8 million) in the second quarter of 2020, compared with €211 million (US$251.1 million) in the corresponding quarter of 2019.

Mowi's results in the second quarter were substantially impacted by COVID-19 and extensive lockdown measures. Prices for salmon declined in all markets during the quarter resulting in reduced profits.

"Despite current market and logistical disruptions caused by COVID-19, Mowi's operations have been running close to normal so far. We have implemented a wide range of protective measures to limit the spread of the virus in our operations. The safety and well-being of our employees is always top priority and we will do whatever we can to keep operations running without compromising health and safety," said Mowi CEO Ivan Vindheim.

Mowi Consumer Products benefited from a shift in demand from foodservice to retail due to global lockdown measures and delivered all-time high sold volumes and results for a second quarter.

"This is an impressive result under the prevailing circumstances and demonstrates yet again the importance of Mowi's downstream strategy," said Vindheim.

Mowi reported operational revenues of €911 million (US$1.1 billion) in the second quarter of 2020. Total harvest volume in the quarter of 104,303 tonnes was approximately in line with guidance. Full year harvest guidance for 2020 is reduced by 8,000 tonnes to 442,000 tonnes due to biological issues in Scotland.

Mowi introduced a cost saving programme in 2018 and the company has cut cost by €118 million (US$140.4 million) to date. However, Mowi continues to experience cost pressure in its farming operations from more challenging biology, stricter regulations and a general cost increase from input factors. This also impacts the rest of the value chain.

After feed, labour is the most important cost item in Mowi. The board has therefore decided to include a productivity component in the cost-saving programme, targeting a 10% reduction in headcount for Mowi by 2024.

"Addressing cost will continue to be of utmost importance in the future. This will be realised through automation, digitalisation, improvement of production processes and right-sizing of the organisation. Mowi's strategy is still to grow the company and the aim is to continue to be a net job creator," said Vindheim.

Distributing dividends to its shareholders is an essential part of Mowi's financial strategy. At the same time, the board considers it is key to maintain a strong financial position, particularly in light of the ongoing COVID-19 pandemic. Hence, under the prevailing circumstances the board has not found it appropriate to distribute a quarterly dividend for the first and second quarter.

- Mowi