Nireus Aquaculture reports financial results 2009

April 2, 2010 09:47


  • Fish sales volume up +15.2%, value up +11.5%

NIREUS achieved a strong growth in fish sales, both in volume and value, benefiting from the well-positioned geographic distribution of its sales network. In FY 2009 fish sales amounted to €118.8 mi (up 11.5%) and 27.7 thousand tons (up 15.2%). In the fourth quarter of 2009, the growth in fish sales was 17.9% in value and 13.6% in volume over the same quarter of previous year, reports with reference to Nireus.

Overall group sales in 2009 amounted to €163.5 mi., posting a slight decrease of 3.7% versus the same period last year and to €37.7 mi. in the fourth quarter (down 1.8%). The decrease in overall sales is attributable mainly to reduced sales of feed and juveniles, a strategy the Group adopted to mitigate the credit risk from the challenging economic environment.

  • Cost reduction actions delivered savings of €19 mi.

NIREUS achieved significant cost savings by reducing costs and limiting capital expenditures. Total expenses before depreciation were reduced by €11.1 mi in 2009 (a decrease of 6%). Sustainable capital expenditures were reduced to €6.9 mi from €14.8 mi last year following the implementation of strict cost control and reduced investments. Due to the long production cycle of farmed fish, lasting 15-24 months, there is a significant lag between the implementation of cost containment measures and the onset of tangible results. The Group thus expects a further decrease in overall expenses in the coming year as a result of current actions for the rigorous management of costs and of a better balance between sales and productions as the sector conditions continue to improve.

  • Negative impact on performance from soft pricing and increased production cost due to large fish sizes

Fish prices remained low in 2009 due to the oversupply that occurred in the sector. Additionally, the Group's preference to retain sales during the period of the steep price decline (October 2008-April 2009) increasingly impacted the production cost of goods sold in 2009, resulting in a decline in profits. This impact, however, is not expected to reoccur in 2010. As a result, earnings before interest, tax, depreciation and amortization (EBITDA) in 2009 amounted to €22.2 mi. (-26%). Net earnings for the Group declined to -€2.98 mi., while net earnings after minority interest were stable at €0.3 mi.

  • Stable debt balances

Interest bearing debt (€258 mi.), of which 68% is long term, remained stable throughout the year. Cash balances amounted to €15.8 mi. A major goal for next year is to improve cash flows and equity ratio with a growth in fish sales and rigorous cost management. In Feb 2010, the number of shares increased by 18.104 shares from the conversion of 8.350 bonds with a total value of €81.580 (from the convertible bond loan issued on July 2007). Share capital consists of 63.628.748 common registered shares of par value €1.34 each, from which 22.390 are treasury shares.


"In a challenging year, NIREUS achieved a strong increase in fish sales, both in volume and value, despite the adversities of the current economic environment. Our operational performance in reducing costs, sustaining capex and improving working capital along with the benefit of our international sales network has enabled the Group to overcome the situation that impacted the Mediterranean fish farming sector recently. These efforts will continue in 2010 through strict cash control and an additional growth in fish sales. This will provide a lower cost base and contribute to a more extensive customer base that will enable us to capture the growth we expect from the recovery of the fish prices.

Our priority is to continue to successfully implement our business plan, with foresees a target on cost savings from the merger of units in major production centers and production automation, and an increase in sales from the opening of new markets, in addition to maintaining flexibility with respect to the market trends. The effects of our operational improvements in combination with our focus on opening new markets are strong foundations from which to benefit from the sector recovery and return to our profitability.

During the first months of 2010 we have noted a significant improvement in fish sales, both in value and volume. We are anticipating the new year with relative optimism, given that the current economic conditions are expected to affect the fish farming sector to a lesser extent as compared to the other sectors".


  • Sales of fish farming products (fish and juveniles) amounted to €127 mi., posting a growth of 4%. Fish sales increased by 11.5% in value and 15.2% in volume. Sales of juveniles to fish farmers were reduced to 38.6 mi. pieces.
  • Sales of fish feed amounted to €21.5 mi. corresponding to 23.3 thou. tons.
  • Sales of other products (fish cages and nets, aviculture, animal culture) amounted to €14.8 mi., posting a decrease of €4.6 mi. Aviculture and animal culture products are sold through the 100% subsidiary KEGOagri.


  • Capital expenditures amounted to €6.9 mi. (€14.8 mi. in 2008) and investments in subsidiaries to €1.3 mi. The Group's investment plan was completed with the substantial investments of the previous 2 years.
  • In 2007-8 NIREUS made major investments in technology that results in drastic reduction of the production time. The implementation of the selective eggs program and the inland pre-fattening units for 10 gr. juveniles achieved a decrease in production time of 7% on an annual basis. The Group has 3 inland pre-fattening units for 10 gr.
  • Exports amounted to € 107.6 mi. and represent 66% of total sales versus 60% last year. Exports constitute 88% of fish sales.

juveniles, 2 in Greece and 1 in Spain. The selective eggs program will cover fully the seabream production by the end of 2010 and the seabass production by mid 2012.


  • The risk from interest rate increases has been mitigated, incrementally, with forward contracts for an amount of €91 mi. The level of coverage is deemed satisfactory since €50 mi of L/T debt is guaranteed by the Greek government and carries an interest rate reduction of 50% and €20 mi. (the convertible bond loan) pays a fixed interest rate.
  • Global demand for Mediterranean farmed fish remains solidly increasing. NIREUS expects the current market conditions to affect the demand for seabass and seabream by a lesser extent as compared to the demand for competing products and other fish species, due to their affordable prices and high nutritional value.
  • NIREUS expects global supply to fall in 2010 as input of new juveniles and biomass growth have been reduced in 2009. In the past, the drop in supply has led to stable or increasing prices. The stabilization of prices at higher levels is expected to give a positive boost to the industry and to the Group's figures.


NIREUS is the largest producer of Mediterranean aquaculture with a top ranking position in all of its business: market-size fish, juveniles, fish feed. The group is fully vertically integrated and operates 67 fish farms, 5 hatcheries, 3 pre-fattening units, 1 R&D center, 1 genetics center, 16 packaging plants, 2 fish processing plants, 2 fish feed factories, a company producing fish farming equipment and a company selling genetic material, equipment, nutrition and health products to aviculture and animal culture. The Group is export oriented and ranks 1st in total exports within the Greek food industry. Additionally, it is the largest shareholder (with a 30.2% interest) in the Norwegian company Marine Farms ASA that is listed in the Oslo Exchange and produces salmon in Scotland, seabass and seabream in Spain and the tropical fish cobia in Central America and Vietnam.

NIREUS follows principles of social responsibility and sustainability and is certified with ISO 9001: 2000, ISO 14001: 2004 and ISO 22000: 2005.

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