High costs eat up Mowi’s earnings: “There is a lot we can do”

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Mowi boss Ivan Vindheim believes much of the inflation is temporary.

Mowi’s report for the third quarter states that the company’s production costs landed at €4.59 per kilo of salmon. The cost level is high, and there are large differences between the different production regions.

“You can take region North [Norway] and multiply with two, then you are in the area of ​​our highest production levels. So there is a lot we can do, regardless of the inflation both we and others see,” Vindheim told TDN Direkt on Wednesday.

Read also: Mowi’s paying out €73m dividend after Q3

Transient
However, the situation with increased prices for input factors is described as challenging, especially since some of the raw materials come from Asia and China, and the bottlenecks in shipping.

“Then you have to find alternative sources and all detours reduce the cost, and create extra labor. That said, we have done well, it has not affected either production or growth at sea,” he said to TDN.

“We believe that much that inflation driven by bottlenecks is temporary and will return to normal soon,” he said.

Mowi’s share price rises by 2.7 per cent after the results were presented.

Trouble in Canada
The quarterly report further states that Mowi “will temporarily hold back on its growth ambition in Newfoundland”. By 2022, the ambition for slaughter in Canada has been reduced by 6,000 tonnes.

The plan is to eventually grow Canada East to 20,000-30,000 tons, but Mowi is not ready to take the next steps until we see stability in the region.

“There is tough biology in the area. The winter is very cold and the summer very hot, this is not Norway and it is more difficult to grow salmon there. We are not ready to take that risk yet, and we need to see stability first,” said Vindheim.

Mowi Canada East lost six million euros in the quarter, primarily due to low oxygen levels that affected both the cost side and the price achieved.