August 21, 2019 / 5:52 AM / a month ago

Salmon farming firm Mowi beats second quarter forecast; rivals Grieg, Leroey lag

OSLO (Reuters) - Mowi (MOWI.OL), the world’s largest fish farming company, posted on Wednesday a stronger-than-expected earnings for the second quarter amid lower costs and high demand for salmon.

The company’s core operating profit surged 26% year-on-year to 211 million euros ($234 million), slightly ahead of analysts’ expectations as well as the company’s outlook, both of which stood at 208 million euros.

“The outlook for the salmon farming industry is strong; the megatrends supporting increased salmon consumption remain intact and (the growth in) supply is expected to be modest going forward,” the company said in the earnings report.

Mowi’s shares, which hit a record high last week, are up 25% year-to-date.

The company, controlled by Norwegian-born billionaire John Fredriksen, maintained a full-year output forecast of 430,000 tonnes of salmon and kept its quarterly dividend steady at 2.60 Norwegian crowns ($0.2892).

Meanwhile, smaller competitors Grieg Seafood (GSFO.OL) and Leroey Seafood Group (LSG.OL) posted weaker-than-expected operating profit for the April-June quarter.

Grieg posted earnings of 309 million crowns, down 27% from the same quarter of 2018.

Analysts in a Refinitiv poll had expected earnings of 358 million crowns.

The company said its costs had risen year-on-year, particularly at its locations in the Shetlands and in western Canada over sea lice and algae blooms that can kill the fish, although it maintained its production forecast for 2019 and 2020.

Leroey, meanwhile, saw a 23% plunge year-on-year to 774 million crowns, lagging the average forecast of 851 million crowns among analysts, and cut its 2019 salmon and trout output forecast to 183,000 tonnes from 188,000 tonnes seen in May.

“The board expects earnings in the second half of 2019 to be slightly higher than those achieved by the group in the first half of 2019,” Leroey said.

Salmon farming company Bakkafrost (BAKKA.OL) on Monday posted a smaller-than-expected drop in second-quarter core profit amid lower salmon output and a decline in prices, while the Oslo-listed fish farming company maintained its full-year production forecast.

Reporting by Terje Solsvik, Editing by Sherry Jacob-Phillips

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