Increase in costs, drop in sales as well as blow to coho markets hit Chilean salmon farmer.
MultiExport posted its Q1 report with an EBIT of USD 10.1 million, lower than USD 27.1 million in the same period of the previous year, explained mainly by the drop in sales prices and an increase in salmon farming costs.
During the first quarter of 2020, the company presented operating income of USD 154.1 million, a figure 12.8 per cent higher than that reported in the same period of the year 2019.
This increase is explained by a higher sales volume that reached 25,516 tonnes, 27.1 per cent higher than that reported in the first quarter of 2019. This was offset by lower sales prices with a weighted average that was 11.2 per cent lower than that registered in the same quarter of the previous year.
In the case of coho salmon, the physical volume of finished product decreased by 19 per cent during the first quarter of 2020 compared to the previous year. In monetary terms (USD) the exports of the species decreased by 34 per cent, mainly due to the decrease in the Japan price, the main export market for this species.
The price in the Japanese market averaged JPY 457 per kg for the first quarter of 2020, reflecting a drop of 39.6 per cent compared to the average price of the first quarter of 2019. This was due to the higher level of inventories due to a higher harvest of the season, with a production of 16 per cent higher compared to the previous season, and lower demand at the end of the period as a result of the Covid-19 impact in the HoReCa sector.
“Regarding the markets where the company markets its products, a sharp drop has been observed in the consumption of the HoReCa segment globally, partially offsetting an increase in the consumption of the retail segment, which has manifested itself in a tendency to the drop in prices. Lastly, with the information available at the date of issuance of these financial statements, it is not possible to estimate the potential impacts that the development of this situation could have in the future,” wrote MultiExport.