Sharp dip for Mowi Q2 profits

SALMON farming giant Mowi expects its operating profit to drop by more than half during the second quarter of this year, it said in a trading update today.

The company is forecasting an operational EBIT (earnings before interest and tax) of 96 million euros, compared with 211 million euros during in the same period last year. No reason was given, but it will almost certainly be due to the fall-out from coronavirus which was at its peak during the April to June period, which is likely to impact on all salmon businesses this year. The full second quarter report, which should explain how much Covid-19 has affected trade, is due to be published at the end of August.

The results, however, are better than many brokers had been forecasting and the situation is expected to gradually improve during the remainder of 2020 as global lockdowns ease and restaurants open up again

Although its global harvest increased on Q2 2019, the output from its Scottish operations was down from 16,000 tonnes to 14,500 tonnes. Farming Canada was also down by 1,000 tonnes to 11,500 tonnes, but Farming Ireland doubled its output to 4,000 tonnes. Farming Norway was also up – from 51,500 tonnes to 56,500 tonnes but output in Chile dropped by 1,000 tonnes to 14,000 tonnes.

Total Operational EBIT per kg through the value chain was approximately as follows; Norway 1.05 euros; Scotland 1 euro (it was 2.9 euros per kg last year) ; Chile 0.8 euros; Ireland 3.85 euros, Faroes 1.9 euros and Canada, where they have been problems this year, a loss of 0.65 euros.

The reported net interest-bearing debt, excluding the International Financial Reporting Standards (IFRS) 16 effects, was approximately 1,380 million euros at the end of the quarter, against the expected 1,348 million euros .