Future’s bright, say Chilean farmers after poor Q1

The country’s biggest salmon producer, AquaChile, was the only one of the six to make a profit, with Multiexport Foods, Salmones Camanchaca, Blumar, Salmones Austral and Nova Austral all in the red.

AquaChile reported to the Financial Market Commission that its results were influenced by lower international prices of salmon during January and February of this year, as a result of the contraction in demand caused by Covid restrictions, and the higher costs of production and logistics.

However, in its income statements, AquaChile stated that recently “there has been a recovery in demand in relevant markets (such as the US, Brazil and China) and the stabilisation of global logistics services”.

The recovery, along with synergies derived from the integration of its constituent salmon companies, had had a positive effect on business margins which was projected to continue improving during the second half of 2021, it said.

39% more volume

Multiexport Foods made an operating loss of US $10 million in Q1, but this was less the $32m it lost in Q4 2020 and had dropped to under $8m by the end of the first trimester at the end of April (see table below).

The company said a decrease in prices in January-March of this year derived in part from a carry-over effect of previous contracts, “so this type of sale did not fully reflect the increase in prices that was observed in the first quarter of 2021”.

Although Blumar’s Q1 figures added up to a loss, the volume of Atlantic salmon it sold in Q1 was 39% more than in the same period in 2020 as a result of the beginning of harvests in the southern Magallanes region, a positive for the future.

Fundamentals intact

Meanwhile Ricardo García, vice-president of Salmones Camanchaca, indicated that “the fundamental factors of the business are intact, and we are confident that our costs will normalise in the second half of this year, which will occur in a very favourable market context, with a solid recovery in demand and a double-digit drop in Chilean supply by 2021, a combination that we estimate will contribute to the recovery of profitability”.

Christian Samsing, vice president of Salmones Austral, recently stated that the company’s Q1 losses “reflect that we are experiencing a period of transition, after a year marked by low salmon prices and the effects of the pandemic on production processes”.

He said that “we anticipate that the situation will gradually normalise, which is already being evidenced in prices”.

Results for the first trimester (T1, January 1 – April 31) of six prominent Chilean salmon farmers. Figues in millions of US dollars.