"We are extremely pleased with the company's development during the quarter, which was helped by high prices and higher harvesting volumes within the fish farming segment. But perhaps even more important, we are now seeing the results of Pan Fish's successful restructuring effort and we have secured for ourselves a leading position with respect to the industry's ongoing consolidation. I am therefore very optimistic about the forthcoming merger and integration with Marine Harvest and Fjord Seafood," says Pan Fish CEO Atle Eide .
The financial statements for the first quarter 2006 do not include Marine Harvest. Fjord Seafood has been included as an associated company, based on a shareholding of 39.97 per cent as at 31 March 2006. For this reason, all the figures below relate solely to Pan Fish unless otherwise stated.
Highlights from the first quarter 2006
|
(NOK million) |
1Q-06 |
1Q-05 |
2005 |
|
Gross operating revenues |
668.5 |
407.4 |
1 858.5 |
|
EBITDA |
155.7 |
48.9 |
309.1 |
|
Operating profit before value adj. biomass (according to IFRS) |
109.1 |
13.1 |
405.2 |
|
EBIT |
164.2 |
9.5 |
457.8 |
|
Profit/loss before tax |
153.2 |
-15.9 |
380.0 |
|
Net profit |
154.7 |
-7.3 |
339.7 |
Fish farming
The fish farming segment had gross operating revenues of NOK 536.1 million in the first quarter 2006, compared with NOK 352.5 million in the same period last year. The sharp increase is primarily due to a 66 per cent rise in harvesting volumes, corresponding to 7,970 tonnes round weight (trw), as well as higher salmon prices than in the same period last year. Operating profit (EBITDA) for the quarter totalled NOK 171.6 million, compared with NOK 48.8 million in the same period last year, an improvement of 252 per cent.
Production costs for marine phase fish fell as planned in both Scotland and Canada compared with the previous quarter. A quantity of fish of less than the planned average weight was harvested in Norway during the first quarter to limit the negative impact of some health problems. This drove up the production cost in Norway for the quarter.
For the year as a whole it is expected that production costs will be lower in all regions compared with 2005. As previously announced, Pan Fish plans to produce between 100,000 and 108,000 trw and harvest a volume corresponding to between 70,000 and 75,000 tgw in 2006.
Value Added Seafood Production (VASP)
The VASP business had gross operating revenues of NOK 148 million in the first quarter 2006, which is significantly higher than the NOK 54.2 million achieved in the same period last year. While the rise is primarily due to the acquisition of Kritsen, Pan Fish France also increased its turnover by 12 per cent compared with the first quarter 2005.
Extremely high raw materials costs had a negative impact on the VASP business's operating performance. However, measures implemented to improve operational efficiency in the two companies led to a considerable reduction in operating costs. The business made and operating loss (EBITDA) of NOK 3.7 million in the first quarter 2006, compared with a loss of NOK 2.9 million in the same period last year.
As previously announced, the creation of a separate seafood division will provide the VASP business with a more solid commercial foundation, and it is expected that this move will produce positive results as 2006 progresses.
Outlook
Pan Fish will continue to work towards the company's long-term cost objectives. This means fulfilling its ambition to be the market's lowest-cost producer of quality salmon, while further increasing production volumes.
"The positive trend from last year is continuing, and underpins our previously expressed expectations that the market will remain buoyant into 2006. Our forecast of an expected rise in planned sales of 25,000 tonnes for the year remains unchanged," says Mr Eide.
Integration of Marine Harvest and Fjord Seafood
The start of 2006 provides Pan Fish, Marine Harvest and Fjord Seafood with a substantially stronger foundation for the forthcoming integration process. Pan Fish is looking forward to establishing a partnership with the other two companies and to realising the potential represented by the resources and competence offered by both Marine Harvest and Fjord Seafood. The companies will set up joint working groups to develop a common platform and set a unified course with respect to the integration process. Other strategic processes which can contribute to the further development of Pan Fish continue unabated.
For further information, please contact:
CEO Atle Eide, +47 911 52 977 or CFO Trine Sæther Romuld, +47 991 63 632
Presentation 1st Quarter 2006:
Interim Report 1st Quarter 2006:
The press release can be downloaded from the following link:
