Cermaq presents Q3 result being its best quarter ever

November 10, 2010 16:06

Cermaq presented an EBIT pre fair value adjustment of NOK 502 million for Q3 2010. Adjusted for gains on divestment, the EBIT was NOK 432 million which is the best quarterly result Cermaq has ever achieved. The main drivers behind the record result are strong salmon prices, major growth in feed volumes and considerable improvements in the farming operations in Chile, reports www.megafishnet.com with reference to Cermaq.

In Q3 2010 the EBIT was NOK 502 million compared to NOK 300 million in the same quarter 2009. The divestment of the Scottish farming operations which was completed in August 2010 resulted in a gain of NOK 70 million. EBIT from normal operations was thus NOK 432 million.

Cermaq also sold its shares in Marine Farms in Q3. The two transactions contributed with a total net consideration of approximately NOK 460 million. Together with the strong operating results this has reduced the net interesting debt by close to NOK 0.8 billion to NOK 1.7 billion at the end of September 2010.
I am very satisfied with the result presented today, says CEO Geir Isaksen. In this quarter we have demonstrated excellent profitability in all parts of our operations. At the same time we have divested Mainstream Scotland and sold our shares in Marine Farms with a satisfying gain.

EWOS presented a strong result with an EBIT of NOK 238 million for Q3 and a return on capital employed (ROCE) of 16.1 %. High activity in all markets and strong demand for EWOS' value added products contributed to a volume growth of 15 % Y-o-Y.
EWOS has over a period delivered stable margins at a satisfactory level. The investments in research and development the last five years have provided EWOS with a product portfolio well adapted to customers needs. The portfolio combined with good operations is essential to maintain the results at a sustained high level, underlines Geir Isaksen.

Mainstream continued to strengthen its results and presented an EBIT of NOK 230 million for Q3. This corresponds to an EBIT per kg of NOK 10.8. Investments in smolt production in Chile and Norway are important for securing future production capacity and quality of smolt. In Chile all atlantic smolt is already in land based facilities, and from 2012 the freshwater production of trout will also be operated in the same way. The acquisition of 37 % of the shares in Ranfjord Fiskeprodukter AS (Norway) enables better utilization of the licenses in Finnmark with smolt supplied from the region of northern Norway. This will ensure long term growth in production.

The sanitary situation has been good in all Mainstream's operations, with low levels of sea lice and continued reduction in the use of antibiotics. In Mainstream Canada there have been a challenging summer with algae blooming and low oxygen levels in the sea. This has resulted in reduced feeding to avoid injuries and increased mortality. As a consequence the production is somewhat delayed versus previous estimate.
Even though the high salmon prices are reflected in Mainstream's result, the result clearly demonstrates the effect of the measures that have been implemented in Chile over the last two years, says Geir Isaksen. The continued strong results in Nordland region in Mainstream Norway this quarter should be highlighted. I am also very pleased with the positive efforts to invest in new capacity to ensure future sustainable growth, concludes Isaksen.

The market continues to be strong, even if prices in the US market have been significantly lower in Q3 than in Q2. Mainstream's estimated production in Q4 and for 2011 remains overall unchanged.

As a consequence of the strong results and significantly reduced net interesting debt, the equity ratio increased by 1.4 % to 52.7 % at the end of Q3. Based on normal seasonal fluctuations Cermaq expects a strong cash flow in Q4.

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