The world's largest salmon producer, Mowi, has reported a 45 percent drop in earnings for the first quarter of 2020 due to costs incurred from the "extensive" measures applied internally and externally during the coronavirus pandemic.

Operational earnings before interest and tax fell to €107 million ($116.2 million) year on year, of which farming operations accounted for €101 million ($109.7 million), sales and marketing €14 million ($15.2 million) and feed €1 million ($1.1 million).

In light of the pandemic, and in line with several others in the industry, Mowi's board has decided to postpone the decision on a first quarter dividend until the second quarter.

"The board considers it essential to maintain a strong financial position amid the heightened uncertainty caused by Covid-19," the company said in a notice to the Oslo Stock Exchange.

"The situation is challenging for all and Mowi is no exception. While our operations have continued to run more or less normally so far, we are incurring more costs than usual due to extensive measures implemented internally and externally. We are monitoring the situation closely and are ready to take further measures if needed."

Scotland takes biggest harvest hit

Mowi harvested a total 83,000 metric tons in the first quarter, 1,000 metric tons down on the guided harvest given in its fourth quarter presentation, and down 19 percent from last year's particularly strong first quarter harvests.

Scotland led the decrease, with volumes falling 42 percent to 9,000 metric tons, but the drop was felt across the board, with Norwegian volumes falling 10 percent to 50,500 metric tons, Chile dropping 30 percent to 14,000 metric tons, Scotland falling 42 percent to 9,000 metric tons and Canada dropping 20 percent to 8,000 metric tons. Meanwhile, production in the Faroes rose 50 percent to 1,500 metric tons and Ireland's production fell to nothing from 1,500 metric tons.

EBIT per kilo was strongest in the Faroes at €2.80 ($3.00), followed by Norway at €1.65 ($1.80), Chile at €1.20 ($1.30), Canada at €0.90 ($0.98) and Scotland at €0.65 ($0.71).

The contract share was 43 percent in Norway and 75 percent in Scotland in the quarter. Blended cost in the first quarter was €0.22 ($0.24) per kilo higher than in the fourth quarter of 2019 on 29 percent lower volumes.

The complete first quarter report will be released on May 13.

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