EBIT impacted as costs continue to mount for troubled salmon farmer.
On Tuesday, Chilean salmon farmer Nova Austral announced the company’s financial results for the third quarter of 2021.
Compared to the previous year, revenues have decreased at the company, mainly due to lower volumes sold (-5.2k tonnes, or -70 per cent).
EBIT was -$4.1 million, having been impacted by NRIs, namely, legal advisory (-$0.3 million), smolts eliminations (-$1.4 million), losses in the JV due to the ISA outbreak ($0.5 million), losses at the hatchery due to a mortality incident (- $4.9 million), costs from non operating SW sites (-$1.0 million), write-off of Beagle licenses (-$7.2 million), severance payments (-$1.0 million), and judicial fines (-$0.2 million).
The company reports that gross profit was lower vs 2020 due to higher ex-cage costs and high prices of the raw material bought from third parties.
Nova Austral has been in regulatory hot water since 2019 over the false reporting of mortality figures, over which it has faced criminal charges. Additionally, in June 2020, Chile’s Council for the Defense of the State (CDE) filed a criminal lawsuit against former company executives, forcing an investigation into their responsibility for fraud. And in January this year, a Chilean court of appeals confirmed a fine of US$217,000, against the salmon farmer and extended the sanction to include the suspension of one production cycle at the company’s Aracena 3 center.