Morpol salmon procesing. (Photo: Morpol)

Morpol expects a tricky Q1

Farming company Morpol said it expects weak margins during Q1 2013 even though the biological performance in Norway is very good and anticipated to stay that way throughout the year. In contrast, in the UK the underlying performance is just okay, and Morpol expects production costs to rise due to additional costs related to treatments and mortalities and higher feed costs.

Morpol's consolidated operating revenue in the fourth quarter of 2012 was EUR 163.1 million, up EUR 12.8 million year-on-year, while operating EBIT amounted to EUR 6.2 million, down EUR 7.3 million.

Operating revenue in processing segment in Q4 totalled EUR 144.4 million against EUR 129.1 million in Q4 2011, due to sales of finished goods results from a strong increase in volumes. Volumes were 21.3 per cent higher in comparison to Q4 2011. Operating EBIT for processing in Q4 2012 reached EUR 3.3 million versus EUR 19.2 million in the previous year.

The operating EBIT margin in Q4 2012 fell to 2.3 per cent compared to 14.8 per cent the year prior, mainly caused by a higher raw salmon material price, steeper marketing expenses from sales volume increase, write-down of cobia and pompano inventories in the amount of EUR 3.6 million and the additional write-down of trade receivables in the amount of EUR 0.9 million.

Operating revenue in salmon farming in Q4 2012 was EUR 41.2 million, having climbed by EUR 4.5 million in comparison to Q4 2011, despite having sold lower volumes. Market prices for salmon increased in Q4 2012 with an average NOS price from Norway at about NOK 26/kg (EUR 3.5/kg), up 15.4 per cent against Q4 2011, and increasing by approximately NOK 1/kg (EUR 0.13/kg) from Q3 2012.

Salmon farming operating EBIT for Q4 was EUR 5.1 million, up EUR 8.0 million year-on-year.

In the UK, the farming operation Meridian Salmon Group produced an operating EBIT of EUR 3.1 million with the sales volume at 5,201 tonnes. The Norwegian operation, Jøkelfjord Laks, generated an operating EBIT of EUR 2.0 million.

Demand for Morpol’s products kept escalating during Q4 2012, helped by relatively low prices at retail in most markets for smoked salmon and speciality products. 

"Morpol is very well placed for future profitable growth," said CEO Jerzy Malek. "Although the market will be challenging during 2013, the eventual integration with Marine Harvest will bring additional knowledge and competence to the group and should result in further efficiency improvements in Morpol."

Related article:

- Morpol ASA : Strong Sales Growth Continues

By Natalia Real
editorial@seafood.media
www.seafood.media

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