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Shares plummet and for sale signs go up at Marine Harvest
OSLO - Shares in the world's biggest fish farmer Marine Harvest ASA slid as much 20 percent on Thursday after it posted third-quarter results below market estimates. It said prices would be steady for the rest of 2007, but the company has plans to sell of two merged divisions.
Third-quarter results were hit by fish disease in Chile and falling salmon prices in the quarter.
The shares fell 20 percent to 4.08 Norwegian crowns yesterday, valuing the company at $2.6 billion,. Losses before interest and tax before fair value adjustments amounted to 22 million crowns ($4.1 million) in July through September against a proforma profit of 765 million in the same quarter a year ago.
Marine Harvest said it was entering a period of strong demand for salmon products as Christmas approaches, but still saw no increase in prices.
"Salmon prices are expected to be volatile at a level close to the present during the fourth quarter," it said. Last week, the export price for salmon was at 23.70 crowns per kilogram. Analysts believe that in a best-case scenario, prices next year would be on average at the same level as in 2007.
Marine Harvest is struggling with lower prices in all markets, and disease problems - especially in Chile, and there are also problems in Norway and Canada. Fish farms in Chile have been hit by the highly contagious fish disease ISA (infectious salmon anaemia). The disease is harmless to consumers but can kill fish.
Higher costs
"Low harvest volumes are expected in Chile in the fourth quarter due to the biological situation," Marine Harvest said in a statement, adding that measures were being taken to bring the fish disease under control.
"The most challenging thing now is the biological situation in Chile. We have to admit it has been more deadly than we thought," acting Chief Executive Leif Frode Onarheim said.
Marine Harvest confirmed its total harvest volume for 2007 will be in a range of 335,000 to 345,000 tonnes, excluding Scottish unit Lighthouse Caledonia - a new division of the group's Pan Fish Scotland and the Stornoway-based Outer Hebrides Seafood.
And now, on the back of these reported losses Marine Harvest has announced that the Lighthouse Caledonia Group,will be floated on the Norwegian stock market.
The move will end speculation and uncertainty for Outer Hebrides Seafood, which was designated for an independent flotation, along with Pan Fish Scotland, during the summer. The company employs 190 people.
Marine Harvest, itself, had been due to float last year but the plans were scrapped when it was taken over by Norwegian group Pan Fish in March 2006.
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