Marine Harvest ASA (NO): Strong results and improved price achievement in a falling market
The Marine Harvest Group achieved an operational EBIT of NOK 894 million in the second quarter of 2011, compared to NOK 792 million in the corresponding quarter of 2010. Higher achieved prices and higher harvest volumes were the main drivers behind the improved results. Marine Harvest has a strong contract portfolio for the second half of 2011, according to Russian Fish Insider Report published by http://www.megafishnet.com/.
Marine Harvest reported operational revenues and other income of NOK 4 192 million (NOK 3 583 million) in the second quarter of 2011. Harvest volumes were 79 932 tons compared to 68 102 tons in the second quarter of 2010. Net earnings in the period were NOK 685 million (NOK 741 million).
- During the last part of the second quarter our industry experienced a sudden and significant increase in supply, leading to a significant decrease in spot prices. Despite this supply shock, Marine Harvest was able to improve average achieved prices in the quarter. Overall operational performance in the group was satisfactory, with record results in Scotland, comments CEO of Marine Harvest ASA, Alf-Helge Aarskog.
Cash flow from operations amounted to NOK 1 581 million (NOK 890 million) in the second quarter of 2011. Net financial items amounted to NOK 400 million (NOK -34 million). Net financial items include interest expenses of NOK 98 million (NOK 105 million), and a positive change in the fair value of the conversion option of the convertible bond of NOK 396. Net interest-bearing debt increased to NOK 5 799 million (4 678 at end of the first quarter), after a dividend distribution of NOK 2 865 million.
The equity ratio decreased to 47.3% at the end of the quarter (55.7% at end of the first quarter). Annualized ROACE was 25.8% (20.8%) and NIBD/Equity was 55.9%, compared to 36.6% at the end of the first quarter.
After changing the organisational structure, Marine Harvest now reports operational EBIT per kilo including contribution from the new Sales and Marketing unit. Comparable numbers for the second quarter of 2010 have been estimated. In Norway we achieved an operational EBIT per kilo of NOK 13.08 (11.58) in the second quarter, while in Scotland and Canada reported operational EBIT per kilo was NOK 13.94 and NOK 4.95 respectively (9.43 and 11.67). Marine Harvest VAP Europe reported an operational EBIT margin of 0.1% (5.6%) in the second quarter of 2011. In Chile we achieved an operational EBIT of NOK -28 million (NOK 2 million).
Marine Harvest expects to harvest a volume of 335 000 tonnes in 2011, of which 79 000 tonnes is expected to be harvested in the third quarter.
- We are concerned about the market balance the coming quarters and will review our production plans and step up marketing activities. Our new Business Area, Sales and Marketing, is now in operation, and will be measured on its ability to improve our price achievement and develop the markets for our products. Global supply in the second quarter was at the same level as in the second quarter of 2008, but at a significantly higher price level. The underlying demand growth which has materialized into higher prices the last years must now be utilized to increase volumes at a different price level. In the second half of 2011 we have a strong contract portfolio entered into at prices reflecting the average achieved price level in the second quarter, says Alf-Helge Aarskog.
For further information, please contact:
Jørgen Andersen, CFO, Tel: +47 21 56 20 09, Mobile: +47 951 43 854
Henrik Heiberg, Finance Director, Tel: +47 21 56 20 11, Mobile: +47 917 47 724
About Marine Harvest
Marine Harvest is the world's leading seafood company and largest producer of farmed salmon, with presence in 21 countries and about 5 000 permanent employees worldwide. The company is headquartered in Bergen, Norway, and is listed on the Oslo Stock Exchange.