Chilean firm Camanchaca reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $15.3 million (€14 million) in the first quarter of 2017, compared with a loss of $7.3 million (€6.7 million) reported for the same period a year earlier.

The improvement is explained by “substantially different circumstances in the first quarter of this year,” the company said.

In the previous year, the peak of the severe El Nino affected the company’s fishing operations, and the algal bloom of the first quarter of 2016 affected the company’s salmon division.

This year, normalized oceanographic conditions are improving operations, and the rise of salmon prices mainly explained by the global shortage of raw material caused by the algal bloom is improving efficiency.

The company’s sales during the quarter were $109.5 million (€100 million), compared with sales of $110.8 million (€101.2 million) reported a year earlier.

A fall in sales in the fishing segment was caused by a delay of sales in jack mackerel, and the low inventories of fishmeal and fish oil from 2016, the company said.

Salmon business drives results up

A 69 percent increase in salmon prices during the period, and a 24 percent reduction of production costs generated a profit of $6.7 million (€6.1 million) in the salmon segment, four times as much as profits reported during the same period a year earlier.

Between January and March 2017, Camanchaca sold 5,765 metric tons of salmon harvested in its centers, a 53 percent drop compared with the same period of 2016.

This was explained by lower stocking levels of 2015, and the effects of the algal bloom, which killed part of the 2017 production, the company said.

However, sales of production from third parties at the company’s offices abroad came to $27 million (€24.7 million), up 23 percent from the same period a year earlier.

This led to a year-on-year balance on salmon sales, total revenue from this segment was $83 million (€75.8 million).

EBITDA in the salmon segment was $18.7 million (€17.1 million), up from losses of $6 million (€5.5 million) reported a year earlier.

However, the positive results of the company’s salmon business were offset by a negative effect of net value adjustment of $6.3 million (€5.8 million), the company said.

EBITDA after fair-value adjustment was $12.4 million (€11.3 million), up from $8.5 million (€7.8 million) reported a year earlier.

Nonetheless, the group reported profits of $2.4 million (€2.2 million) during the year, compared with losses of $2.7 million (€2.5 million) a year earlier.

Camanchaca expects salmon harvests to double in the second quarter of the year, and in 2018, it expects harvests to reach 42,000 metric tons.

Fishing business normalized, but not reflected in Q1

In its fishing sector, Camanchaca reported a loss of $4.6 million (€4.2 million) during the first quarter, due to the low inventories the group had from the fishing season of 2015-2016 and a delay in catches.

“There was a substantial growth in catches by the end of the quarter destined to fishmeal and fish oil production, which the company could not sell before March,” the company stated in its report.

“Camanchaca has not monetized yet the positive fishing operations of the first quarter," it said.

However, fishing landings in the first quarter were higher than catches registered in the first quarter of 2016.

The higher landings allowed the company to produce 12,637 metric tons more of fishmeal and fish oil, which helped it reduce costs caused by fishing bans at the beginning of the year. This resulted in lower production costs of fishmeal and fish oil.

“In 2017 we will have higher pelagic landings in the north and the south, and favorable biological conditions in salmon farming, which in our centers, meant a reduction of 24 percent in costs in the first quarter of the year,” said Ricardo Garcia, CEO of Camanchaca.

“Camanchaca has an important inventory of fishmeal and fish oil that will be sold over the coming months, and which was produced at low costs,” Garcia said.

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Finance

Strong salmon business boosts Camanchaca's Q1 earnings