Mowi Q3 results show high volumes, lower earnings
MOWI Scotland continued to be affected by a series of biological problems during the third quarter of this year, but improvements are on the way..
The world’s largest farmed salmon producer has published its Q3 results which show, as expected, it achieved a global EBIT of €80 million, against €148 million for the corresponding period last year.
Its Scottish operations produced an EBIT of €5.6 million against €26.2 million in 2019, the equivalent of €0.35 per kg (€1.34 in 2019). Mowi said reduced earnings from the third quarter of 2019 were due to low prices from Covid-19, as well as lower volumes and increased cost on challenging biology, including an algal bloom which affected several of its farms in the Argyll region.
It said: “The overall price achieved was 23 per cent above the reference price in the quarter (20 per cent above). Contribution from contracts relative to the reference price was positive in the third quarter of both 2020 and 2019.The contract share was 53% in the quarter compared with 41% in the third quarter of 2019. Price achievement was negatively impacted by the size profile.The third quarter harvest volume was 16, 114 tonnes gutted weight (19, 634 tonnes).Volumes were negatively impacted by challenging biology and early harvest.”
On the disease issues, Mowi explained:“The cost level in our Scottish operations is affected by the biological situation... the salmon harvested in Q3 2020 had elevated costs related to biological issues in both the third quarter and prior periods including algal bloom, CMS (cardiomyopathy syndrome) , PD (pancreatic disease) and lice.
The cost items which increased from the comparable quarter were mainly feed and health related, the company said: “Production in the third quarter improved compared with the corresponding quarter of 2019. Incident based mortality losses amounted to €4.3 million mainly related to algal bloom, CMS, storm and treatment losses (€8.8 million in 2019).“
Mowi chief executive Ivan Vindheim said:“Our operations have been running close to normal despite further Covid-19 restrictions... although retail sales are strong, our earnings are impacted by falling prices as a result of lower net demand.”
Mowi reported global operational revenues of €958 million (€1,023 million) in the third quarter of 2020.
The board has decided not to pay a third quarter dividend.