Record profits predicted for Chilean farmer in 2020

DNB Markets projects that Camanchaca will reach revenues of $373 million and net profits of $59m in 2020, even though it does yet know how much the company made last year.

Camanchaca will announce its financial results for 2019 in the next few days.

Big fourth quarter

In a recent financial report, DNB Markets said it expects Camanchaca to have chalked up revenues of $330m in 2019, which will grow to $373m during 2020. The same will happen with its EBITDA, which will advance from $91m to $99m in the period, and with its net earnings, which will expand from $52m to $59m. 

DNB Markets wrote: “We expect an operating EBIT of $27.5m in the fourth quarter, almost the same as the three previous quarters combined, since 2019 was a very delayed period in terms of harvest volumes. 

“The commercial update published on January 13 revealed harvest volumes slightly lower than our expectations and the guide published with the third quarter report, but the increase in the 2020 harvest guide suggests that part of the volumes may simply have been introduced into the first quarter of this year.” 

5.8 kilo fish

Camanchaca’s update “also revealed harvest weights of 5.8 kilos, considerably higher than the estimated industry average of 5.3 kilos. Higher harvest weights generally indicate higher prices achieved and lower production costs,” DNB Markets detailed in its financial report.

DNB Markets said that its new target price for Salmon Camanchaca shares is NOK 82, which is based “on a 20% discount against the multiples of Grieg Seafood”. This is despite the fact that the Chilean company has fulfilled its promises made for double listing on the Santiago and Oslo stock exchanges with respect to harvest costs and volumes.

“The company is still trading its shares at a substantial discount compared to its Norwegian counterparts despite not being exposed to the risk of resource taxes or pricing charges. Chilean biology may be more risky, but we consider Salmones Camanchaca as one of the best operators in the region,” said DNB Markets.

A window for investors

Camanchaca vice president Ricardo García told Fish Farming Expert’s Chilean sister site, Salmonexpert, that listing on the Oslo Stock Exchange had allowed the company to “attract the interest of investors from different developed countries, specialised in the seafood sector”. 

He continued: “In addition, six Norwegian financial institutions, of recognised international prestige - such as DNB Markets - have joined the follow-up of the action and prepare quarterly reports that serve national and foreign investors to have an independent opinion of the evolution of business and relative valuation.

“The Oslo Stock Exchange is a window that has allowed Salmones Camanchaca to gain greater visibility in the global investor community, contributing to its liquidity and valuation. 

“The potential of accessing new sources of financing should also be mentioned if necessary in the future. 

“We also believe that this greater visibility contributes to the development of local aquaculture, which through Salmones Camanchaca captures interest and attention, generating greater knowledge and opening up new opportunities.”