Competitive markets dampen BioMar results:“It has been a challenging yet rewarding year”

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Though Danish feed giant reaches 2018 expectations with EUR 95.5 million EBITDA despite “competitive situation”.

In a press release posted on Friday, BioMar Group reported that it had delivered on the growth aspirations with an increase in revenue as well as volumes. It wrote also that “as expected, the earnings did not keep up with the growth in volumes due to the competitive situation in the Norwegian market. However, the other markets were able to compensate for a challenging situation.”

With a result of EUR 71.3 million, BioMar Group reached the high-end of the 2018 EBITDA guidance communicated in Q3 (EUR 70 – 72.5 million). Revenue grew 4 per-cent from EUR 1.33 billion in 2017 to EUR 1.38 billion in 2018, mainly derived from growth in volumes of 5%. Across geographies and species BioMar experienced a very positive year, except in Norway where the company did not win the sales contracts expected.

“It has been a challenging yet rewarding year. We have not fully been living up to our expectations, but I believe we have leapt forward and created a solid foundation for sustainable business at a truly global scale. Furthermore, we have during the last part of 2018 taken several initiatives to improve our competitive position in Norway through organizational changes and efficiency improvements, building upon our strong product portfolio within salmon. Having said this, we believe the actual competitive conditions in Norway are not sustainable in terms of profitability. For the time being there is enough capacity in the market, but with the current market growth there will, in the near future be a need for new capacity investments. However, with the current return on invested capital in the market, it will be difficult to defend further investments”, explained CEO BioMar Group Carlos Diaz.

“We are looking forward to a year with revenue at the same level as in 2018 but with increased earnings. We expect to generate EBITDA in the range of 820-890 million (EUR 110-119 million) from our consolidated companies of which approx. 130 million DKK (EUR 17.4 million) will be derived from new IFRS16 accounting rules. At the same time we continue our strategy of sustainable growth. I am looking forward to opening the second factory in China, preparing for the start-up in Australia and the inclusion of our third production line in Denmark,” concluded Carlos Diaz.