Morpol ASA - Strong sales growth in a challenging environment
Salmon commodity prices remained at a high level in the quarter, impacting processing margins negatively. The farming segment benefit from the high prices. The Morpol Group had a net profit of continuing operations of EUR 11.9 in the fourth quarter (EUR 18.9 million).
Operating revenues higher than prior year
Operating revenues in quarter four 2010 were above prior year at EUR 163.1 million (EUR 138.9 million). The revenue increase was mainly due to farming revenues which were not included prior year and increased processing volumes.
Total sales volume grew by 19percentcompared to fourth quarter prior year. There was a good volume development compared to 2009 in all categories with the exception of Specialities. Cold smoked salmon sales growth resumed in the fourth quarter. Demand for salmon is still high though it has slowed in the second half of 2010.
"Given the extreme conditions in the quarter, with severe weather in December and record high salmon prices, Morpol delivered a good result. We increased prices for our products in the period, and we continued to experience strong sales growth", says CEO Jerzy Malek.
Companies acquired during the third quarter 2010 are included in the Group's consolidated results for the fourth quarter. The seabass/bream in Spain(Culmarex) and cobia operations in Vietnam and Belize acquired from Marine Farms as classified as held for sale and are presented as discontinued operations.
"Our focus remains on producing stable, good quality products designed to satisfy customer needs. We will exploit the most attractive markets and we believe the entry into salmon farming will provide a platform for further expansion. With higher consumer prices in 2011 and increased global supply in the second half, it remains to be seen what the impact will be on raw material prices", comments Jerzy Malek.
Morpol had a net interesting bearing debt (NIBD) of EUR 148 million at the end of quarter four, down from 156 million at the end of third quarter. The decrease is mainly due to higher cash balances due to the equity issue of approximately EUR 38 million made in December.