OSLO Marine Harvest (MHG.OL), the world's biggest fish farmer, reported soaring profit on Wednesday and said its ample cash would allow it to raise dividends and make acquisitions.
The company said near record salmon prices due to a temporary decline in global supply and an expected jump in sales volumes next year would give it the flexibility to push ahead with investments and expand.
"Marine Harvest is one of the few major industry players who will have significant growth in 2014," it said in a quarterly report.
"This situation, combined with a leveling off in the fixed asset investments, and an anticipated tight supply/demand balance, is likely to lead to increased dividend and acquisition capacity."
Marine Harvest, worth $3.7 billion at current prices, spent much of the second quarter trying to acquire rival Cermaq CEQ.OL but was ultimately rebuffed when the Norwegian government, the firm's top owner, rejected the deal.
Fish farmers have enjoyed an exceptional year so far as global supply growth will slow to around 1 percent this year due to difficult conditions in top producer Norway, leaving markets tight and willing to pay a premium.
Analysts at brokerage ABG see Norwegian salmon prices at 36.7 crowns a kg this year and 35 crowns next year, up from 26 crowns last year.
Marine Harvest, part of shipping tycoon John Fredriksen's business empire, expects to produce 335,000 tonnes (1.1023 ton) of fish this year, down from a previous guidance for 350,000 tonnes, as cold weather in Norway reduced fish sizes.
For next year, it sees production jumping to 390,000 tonnes, just below market expectations for 402,000 tonnes.
Its operating profit in the second quarter nearly quadrupled from a year earlier to 901 million Norwegian crowns, in line with a preliminary 900 million announced in July.
It also proposed an extraordinary dividend of 0.05 crown per share.
(Reporting by Balazs Koranyi; Editing by David Cowell)