Fourth quarter results speak volumes
Mowi recorded an all-time high operational result in Feed in the fourth quarter of 2019 and the full year, driven by record high volumes.
Operational EBIT in the quarter for Feed overall was €13.8 million (compared to €5.8 million for the same period in 2018), with Norway making €15.9 million.
Feed volumes in the quarter were 112,277 tonnes (91,583 tonnes), of which 19,779 tonnes came from Mowi’s new feed plant in Scotland.
Volumes sold in the fourth quarter reached 130,034 tonnes (109,850 tonnes), of which 23,391 came from Scotland.
In Scotland, operational EBIT was negatively impacted by low volumes and the start-up phase of the new feed plant.
The volume delivered from Mowi Feed accounted for 95 per cent of total feed delivered to Mowi Norway, compared with 96 per cent in the fourth quarter of 2018.
In Scotland, the volume delivered from Mowi Feed accounted for 91 per cent of total feed delivered to farming.
Mowi said it is planning to further expand its overall operations in Scotland although it has not provided any details or a timetable.
The company announced its intention in its 2020 outlook report from the board of directors, which also named Norway and Canada for further growth.
The report states: ‘Being the largest global processor of salmon yields Mowi significant scale advantages. The board believes that improvements within automation and digitalisation can be realised with strong leadership and execution.
‘In 2020, Mowi will continue to invest across its value chain to support organic growth and strengthen the asset base.
‘The capital expenditure budget for 2020 is approximately €265 million (£223 million). Freshwater investments continue; in Norway Region North, Sandøra is expected to be completed this year, and expansion projects of existing smolt facilities in Region Mid and Region South continue.
‘The new hatchery in Canada East is in the construction phase and in Chile expansion investments have been sanctioned.
‘Selected sea water expansions in Norway, Scotland and Canada will also be undertaken.
‘Furthermore, Consumer Products expects to undertake several automation projects in Europe and the US, in addition to a new value added processing facility in France.
‘Mowi has significant potential to further grow its farming volumes based on the existing licence footprint.
‘As such, expected working capital investments in the region of €90 million relate to further biomass growth, and also growth in Consumer Products and Feed.’
Mowi now has 500 stores featuring its MOWI brand in Poland and said it is set to expand into other countries with the brand.
It is planning to launch in the retail segment in France, with the development of its new highly automated and modern smokehouse in Kritsen.
And, as announced last month, the MOWI brand will be launched in the US on Amazon.com’s fresh food delivery division, Amazon Fresh, on March 14.
‘To address the competitive processing market, Mowi will establish a Global Processing Excellence Team with the task of realising improvements related to Mowi’s processing plants,’ said Mowi in its report.
Mowi has 38 primary and secondary processing facilities in 19 countries.
On the coronavirus crisis, the board said it is closely monitoring the situation, adding: ‘Salmon is a globally traded product and any kind of trade friction could potentially impact the industry and Mowi negatively.
‘However, notwithstanding this potential short term issue, the medium and long term outlook for the salmon farming industry remains strong.
‘Demand continues to develop favourably and industry supply growth for 2020 is expected to be approximately four per cent according to Kontali Analyse.’