Marine Harvest sees demand and disease boosting salmon prices
World’s biggest fish farmer reports record quarterly profit
Oslo - Fish diseases and strong demand are likely to limit salmon supplies and support prices into 2019, the world’s biggest fish farmer Marine Harvest says, as it reported a record quarterly profit.
The Norwegian company, which has production in Chile, Scotland, Ireland, the Faroe Islands, Iceland and Canada as well as Norway, said it expected global salmon supplies to rise 4% to 5% in 2018 against 5% to 7% previously.
It sees supplies in 2019 increasing 1% to 6% .
“Our growth numbers for the industry are a little bit lower than Kontali’s [a leading Norwegian researcher]. Why? We are looking at the biological issues we are facing, so we expect modest growth in Norway,” chief financial officer Ivan Vindheim said at the third-quarter results presentation.
Sea lice levels have risen in Norway in the second half of 2018, leading to earlier harvesting, lower weight of the fish and higher mortality rate.
Marine Harvest now expects Norway, which produces about half of the world’s salmon, to increase output by 4% to 5% in 2018 down from 6% to 9% previously.
For 2019, it sees Norwegian output in a range of down 1% to up 3%.
In contrast, production at the world’s second biggest salmon producer Chile is recovering at a double-digit percentage rate, and that is expected to continue in 2019, Marine Harvest said.
As demand is strong, Vindheim said he expected a shortage of fish in 2019. Europe is by far the biggest market for Norwegian salmon, although China, Brazil and the US had the fastest growth rates at above 10% in the third quarter.
Marine Harvest’s operating profit rose to €207m in the quarter from €194m in the same period in 2017, above its preliminary guidance of €204m.
“There is strong consumption and good demand in all markets, if you have good products it shows people are willing to pay for good products,” CE0 Alf-Helge Aarskog said.
The average market price for salmon was €5.72/kg in Norway in the third quarter. The 12-month forward price on Nasdaq is currently €6.8/kg.
In early trade, Marine Harvest’s shares were up 1.8% at 205.1 Norwegian crowns.