Nova Austral EBIT down 80 per-cent in Q2

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Higher volumes offset by low market prices.

The Chilean salmon farmer Nova Austral, owned by the equity funds Altor Fund III and Bain Capital, posted its Q2 report on the Oslo Stock Exchange.

Nova Austral had a 4 per-cent increase in revenues this Q2. USD 33.9 million from last year’s USD 35.2 million, which was mainly due to higher volumes sold that were partially offset by lower market prices due to the Covid-19 pandemic.

EBIT before fair value adjustment was USD 1.2 million, down 80 per-cent from Q2 2019’s USD 5.7 million.

The salmon farmer said that it had an increase in distribution costs driven mainly by higher refrigerated storage costs and logistics due to an increase in sales of fresh products and higher volumes in general.

It said that inventories grew due to higher stocks of finished products (USD 17.4 million). And a reduction in current biological assets was due to lower volumes of biomass in the water and prices.

In August, Nova Austral bondholders approved to restructure USD 300 million in bonds. Under the proposal, the bonds are to be split into two tranches, USD 200 million will become First Lien Bonds and the remaining USD 100 million will become Second Lien Bonds. The maturity date for the bonds was extended by 5.5. years until November 2026.

“Sales to many of our foodservice customers (some of our most important clients) have recovered somewhat since lockdown measures in Europe and US have eased. Our sales to retail clients continue growing, especially large clients in US and Europe (fresh products approx. 50-60 tonnes per week .ed). Nova Austral expects this trend to continue at least during 3Q and 4Q 2020 in USA and Europe. Demand from Russia has increased strongly as Nova Austral is one of the few Chilean companies able to sell to such market,” wrote Nova Austral.