El Niño's end nets profits for Austevoll

The company, whose Pelagia subsidiary has three factories in the UK and one in Ireland, had a turnover in the first half of 2017 of NOK 11 billion compared with NOK 9 billion in the comparable period last year.

EBITDA (earnings before tax, interest, depreciation and amortisation) increased from NOK 1.9 billion in 1H 2016 to NOK 2.9bn this year. In addition to good income from its Lerøy salmon farming subsidiary, improved fishing, including for anchovies in Peru through its subsidiary Austral, lifted Austevoll's bottom line.

Peru is one of the largest fishmeal and fish oil producers in the world, and the size of Peru means its production normally affects the pricing of fishmeal worldwide.

"The three preceding years have been characterised by low quotas and difficult operating conditions in Peru. Weather phenomenon "El Niño" has characterised the period. The departments following the weather phenomenon reported a normalisation of ocean temperatures in 2017. This is supported by the positive development in the fishery," wrote Austevoll Seafood in its half-yearly report.

Anchovies

The total quota for the season was 2.8 million tonnes, compared with 1.8 million tonnes in the same season 2016. Austral has 6.87 per cent of the quota for catches of anchovy in the center / north of Peru, and just under 4 per cent of quota in the south. In addition, the company has fishing rights for horse mackerel and mackerel.

"Nationally, a total of 2,370,000 tonnes of allocated quota of 2.8 million tonnes was fished in season. This is a significant increase in volume compared to the first season in 2016 in which 0.9 million tonnes of the total allowable catch of 1.8 million tonnes were fished by the season's end," Austevoll reported.

Lower prices

As a result of increased quotas for fisheries in South America and North Atlantic fish species into the production of fishmeal and fish oil, there has been a decline in market prices for both the first half of 2017.

"The second quarter was also a good production quarter for fishmeal and fish oil in Europe. The price level for fishmeal in Europe has been falling in the first half of 2017, influenced by a good second fishing season in Peru in 2016 and a quota of a total of 2.8 million tonnes for the first season in 2017," said Austevoll.

In addition, the quotas in the North Atlantic for fish species used in fishmeal and fish oil in Europe increased significantly in 2017 compared with 2016.

"The prices, however, have stabilised in the third quarter. Price Achievement for fishmeal FOB Peru (super prime) is now USD 1,450, while the CIF Hamburg prices for fishmeal (standard 64% / 65%) is US $ 1,355," said Austevoll.

Austevoll's Pelagia subsidiary co-owns UFI Aberdeen, which produces fishmeal and oil for aquaculture, poultry and pig feed, and Rossyew Ltd, Greenock, which processes trimmings from the salmon industry to produce oil and protein ingredients for animal feed. It also has a factory in Grimsby and one in Killybegs, County Donegal in Ireland.