Record volume but lower earnings for Mowi in Q3
The world’s biggest salmon farmer, Mowi, harvested a record third-quarter volume of fish this year but saw operating profit drop by almost half to €80 million from €148m in Q3 2019.
Mowi said results were largely impacted by Covid-19 restrictions and seasonal high volumes.
“Our operations have been running close to normal despite further Covid-19 restrictions in the quarter,” said chief executive Ivan Vindheim in a press release. “However, the pandemic still impacts out-of-home consumption to a large degree, and although retail sales are strong, our earnings are impacted by falling prices as a result of lower net demand.”
Consumer Products record
Mowi reported operational revenues of €958m (Q3, 2019: €1,023m) in the third quarter of 2020. Total harvest volume in the quarter of 125,773 tonnes (116,989) was approximately in line with guidance. Full-year harvest guidance for 2020 is unchanged at 442,000 tonnes. Harvest guidance for 2021 is 445,000 tonnes.
The company’s Consumer Products division delivered a record Q3 volume of 60,539 tonnes of product and made record Q3 earnings of €21.2m due to the shift in demand towards what Mowi calls “elaborated products” due to Covid-19.
“I am very pleased that both Farming, Feed and Consumer Products delivered all-time high quarterly volumes. Mowi’s integrated value chain has yet again demonstrated its strength during these unprecedented times. It is also encouraging to see that farming production cost has improved,” said Vindheim.
Focus on volume growth
Mowi said that although its farming volumes have grown significantly over the past few years, the company has been lagging behind the industry’s farming volume growth trajectory. Accordingly, Mowi will put even more focus on growing farming volumes, something it will address in detail at a Capital Markets Day on March 17 next year.
“Global supply growth in 2021 is expected to be 1% and would under normal circumstances be very supportive of strong salmon prices. Whilst Covid-19 has significantly impacted the salmon market and prices in the short-term, we still strongly believe in the positive long-term outlook for the industry, and for Mowi in particular,” said Vindheim.
The company said that the need to preserve cash and maintain a strong financial position, particularly in light of the ongoing Covid-19 pandemic, meant it would not be distributing a quarterly dividend for the third quarter.
