RAW MATERIAL PRICES INFLUENCE PROCESSING MARGINS
Seafoods achieved operating revenues of NOK 605 million for the first quarter
compared with NOK 667 million in the same period of last year. Adjusted for
Nordic Group, this represents an increase of NOK 42 million in operating
revenues for the remaining business. The group could report an EBITDA of NOK 67
million for the first quarter, compared with NOK 83 million in the same period
Aker Seafoods had operating
revenues of NOK 605 million for the first quarter, compared with NOK 667
million in the same period of last year.
The decline in operating revenues reflects the disposal of Nordic Group
by Aker Seafoods during the first quarter, with accounting effect from 1
Adjusted for the disposal of Nordic Group, the
company’s operating revenues rose by NOK 42 million during the first quarter
compared with the same period of 2005. This primarily reflects a general
increase in whitefish prices.
Aker Seafoods reported an EBITDA of NOK 67 million for
the first quarter 2006, which represents a reduction of NOK 16 million compared
to the same period in 2005. The reasons for the reduction is the lower catch
volumes, especially on cod, and the higher bunker prices in the harvesting
business area compared to the same period in 2005. Further the profitability in
the processing business area has been influenced negatively by increased raw
material prices and unfavourable development in currencies in the first quarter
2006 compared to the same period in 2005.
This resulted in an EBITDA-margin of 11.0 percent for the first quarter
of 2006 compared with 12.4 percent in the first quarter of 2005.
quarter has been a challenging three months, where a high price on raw material
has put pressure on the company’s land based activities. In the short term this
is challenging for the Group’s processing, but increased willingness to pay
high prices for quality seafood products promises exciting opportunities in the
future. Long term trends, with increased demand for healthy seafood forms a
solid basis for optimism for the industry. Reduced catches of cod in the first
quarter was in line with the stated plan of levelling out activity over the
year, comments Yngve Myhre CEO in Aker Seafoods ASA.
As with the salmon processing industry, the Aker
Seafoods processing plants have faced a substantial rise in raw material
prices. As communicated earlier, securing immediate compensation for this
increase from customers in the frozen fish segment is difficult. In addition, Asia
is sending supplies of low priced cod fillets to Europe.
The overall effect is that the processing industry has failed to secure full
compensation for the rise in raw material prices.
A three per cent strengthening of the Norwegian krone against
important European trade currencies in the first quarter has had a negative
effect on profitability, since about 80 per cent of total sales for the
processing segment are made to Europe.
Net financial expenses for Aker Seafoods came to NOK
11 million in the first quarter, an improvement of NOK 5 million from the same
period of 2005. The level of net financial expenses is in line with earlier
communications from the company.
Yngve Myhre, CEO Aker Seafoods ASA. Telephone: 24 13
Bent Skisaker, CFO, Aker Seafoods ASA. Telephone: 24
13 01 60