Villa Organic AS is a Norway-based company engaged in organic salmon and trout farming

COMPANY OF THE WEEK: Villa Organic Increased Profits, CEO Resigns

Villa Organic AS (Public, OSL:VILS), a fully integrated fishfarmer in Norway, has published its results for the third quarter 2010.

Highlights – Third quarter 2010

• Villa Organic increased the profit in the third quarter. The EBIT was MNOK 26,9 and net profit before tax MNOK 20,2. EBIT per kilo was NOK 7,45
• Harvest volume in Finnmark was 3.607 tons. There was no harvesting in the Møre region
• Growth in Biomass has been lower than expected due to lower sea temperatures. Sea temperatures in East Finnmark have been about 1 C lower than last year

Growth in biomass has been lower than expected due to lower sea temperatures

Operations

Despite the lower temperature in east Finnmark, Villa Organic is maintaining its overall harvesting estimate for 2010 at 11,000 tons (4,000 tons in Q4). Higher mortality at one site in July due to BKD and CMS virus caused higher production cost on fish harvested in July.

Villa’s build up process of the company in Finnmark continued with full force. A total 54 MNOK was invested mainly in new farming facilities to increase the production and is according to the growth plan.

Villa Group has entered into an agreement with Billund Akva to build a smolt recirculation plant in connection with the Villa group’s facility in Moltustranda.

Villa Organic's organic salmon portions

The plant will be completed in mid-January 2011. After completion the plant will have a capacity of 3 million smolts per year Villa has the sea lice situation well under control through the use of wrass, in the Møre region. In the Finnmark the sea lice challenge is limited.

In August a capital expansion towards employees was carried out successfully. The aim was to raise MNOK 6,75 and the issue was oversubscribed. The capital of the company has after the share issue increased to NOK 118.330.020 with a total of 118.330.020 shares.

Despite the lower temperature in east Finnmark, Villa Organic is maintaining its overall harvesting estimate for 2010 at 11,000 tons

Financial Key Figures

The operating revenue in Q3 was MNOK 131,4 million. EBITDA for the period was MNOK 34,3. The EBIT was MNOK 26,9. The company is not adjusting the biological assets according to the IFRS accounting principles. The equity ratio at the end of third quarter is 36 percent.

Operational Performance

As sea temperatures in Finnmark have been lower than prognosis, production and growth during the quarter has been lower than expected. The quality of smolt from some shipment was not according to requirements and as agreed.

The biomass per September was 8.960 tons, of which 1214 tons was the 2008 generation, 6.753 tons was the 2009 generation and 909 tons 2010 generation.

The biomass in Møre reached 1.561 tons, of which 1.302 tons was the 2009 generation and 259 tons 2010 generation. Harvested volume (HOG) in Q4 is expected to be 4 000 tons.

Sales and Market Outlook

The market has been strong during the quarter, and contracted prices for Q4 reflects the recent market prices. The Board of Directors said that expects prices to be solid for its products in 2010.

After Villa Organic released its financial results, CEO Jan Fossberg resigned. Fossberg has led the company in the restructuring phase, since the summer of 2009.

"Villa Group has been a huge challenge, and I'm happy with what we have achieved so far. Following extensive restructuring the company stands today as a talented and forward-looking company. Everything is therefore right and Villa will be able to achieve its growth ambitions. I have therefore concluded, after an overall assessment, that it is right for both me and the company that others now take over the baton", says Jan Fossberg.

The company's CFO Vidar Skaar has been appointed acting CEO of Villa Organic AS.

About Villa Organic AS

Villa Organic AS is a Norway-based company engaged in fish farming. The Company’s operations include the farming and processing of trout and organic salmon.

The processed, organic salmon is offered in frozen, fresh and smoked forms. Its operations are located in the Møre, Romsdal and Finnmark counties, in the North-Eastern part of Norway.

The Company is active through a number of subsidiaries, including Villa Miljolaks AS, Villa Arctic AS, Villa Smolt AS, Villa Sales AS and Kirkenes Processing AS. During the fiscal year ended December 31, 2009, Villa Organic AS divested its subsidiary, Villa Cod Farm AS and thus its cod farming operations.

Photos and Video: Villa Organic AS

Margaret E.L. Stacey
Editor Companies and Products
editorial@seafood.media
www.seafood.media

City:	Alensud
State/ZIP:	(N-6010)
Country:	Norway
Phone:	+47 70 17 81 70
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