Bret Scholtes, Omega Protein's CEO. (Photo: Omega Protein/FIS)

Human nutrition segment affects Omega Protein revenues

Nutritional product company Omega Protein Corporation experienced a 3 per cent drop in revenues in the third quarter compared to the same period in 2015, to USD 108.8 million mainly due to a decrease in human nutrition revenues.

The firm’s executives explained that the decrease in human nutrition revenues reflected lower sales of specialty oils, including coconut oils.

On the other hand, the firm achieved an increase in animal nutrition revenues, which was so thanks to increased sales volumes of 16 per cent for fishmeal and increased sales prices of 4 per cent for fish oil, partially offset by decreased sales prices for fish meal and decreased sales volumes for fish oil.

"Our animal nutrition segment continued to benefit from favorable volume and pricing which produced the highest quarterly adjusted EBITDA since we started calculating it,” pointed out Bret Scholtes, Omega Protein's President and Chief Executive Officer.

Scholtes also highlighted a successful fishing season in the Gulf of Mexico with solid harvest and production results, which will help them meet the high demand for their products in the quarters ahead.

During the analysed period, the Company decided to focus its omega-3 oils manufacturing operations on non-concentrated oils and dispose of its Batavia, Illinois oil concentration facility.

The firm’s adjusted EBITDA totalled USD 29 million for the third quarter of 2016, compared to USD 28.7 million for the same period last year and USD 28.6 million for the second quarter of 2016.

As to the outlook for the future, the Company’s executives expect to gain benefits from the decision taken by Atlantic States Marine Fisheries Commission (ASMFC) to increase the Atlantic Menhaden harvest quota, which is expected to take effect for the 2017 season.

The increase brings the total annual amount of Atlantic Menhaden that can be landed by Omega Protein and independent bait fisherman to 200,000 metric tons.

The Company also expects that Virginia will maintain its 85 per cent share of the coastwide allocation for its fish meal/oil fisheries and bait fisheries for the 2017 season. If Virginia maintains its current allocation split between fish meal/oil fisheries and bait fisheries, then the Company believes that in 2017 the Company's Atlantic fish catch limit will be approximately 152,000 metric tons.
 
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