Mowi Salmon Production Rises 19% but Profits Plunge! Soaring Costs Lead to Market Disappointment

Mowi, the world's largest salmon producer, recently reported its production results. Data shows that the company achieved significant year-on-year growth in salmon production during the year, with a specific increase of 19%. However, affected by rising costs, its EBIT did not meet the market's consensus expectations.

Specifically, Meway achieved total salmon sales of 161,000 tons (HOG equivalent) in the third quarter, which not only exceeded the company's previous production forecast (159,500 tons), but also represented a significant increase over the same period last year (130,500 tons). In terms of geographical distribution, Norway, Chile, Scotland, Canada, Ireland, the Faroe Islands and Iceland all contributed, with Norway accounting for the majority of production at 106,000 tonnes.

In terms of financial performance, Meiwei's operating profit before interest and tax (EBIT) in the farming segment was approximately 173 million euros ($189 million) in the third quarter. However, its combined farming costs also reached 5.72 euros per kilogram, an increase of 0.12 euros per kilogram compared to the second quarter. In the Processing and sales segment, the operating EBIT for consumer products was 43 million euros, while the operating earnings before interest, tax, depreciation and amortization of the feed production business was 25 million euros.

In response to this performance, Fearnley Securities analyst Theodor Aleksander Rosenberg pointed out that Mewei's operating EBIT was 7% below brokerage expectations, but also below the consensus level of the market, the gap is 5%.

Further analysis shows that the increase in farming costs and the fall in salmon prices are the main reasons for the decline in profit margins per kilogram, which reached 1 euro, compared with the market's expectation of a decline of 0.9 euro. However, some analysts believe that in the upcoming fourth quarter, the cost of salmon is expected to be optimized. This is mainly due to the expected decline in feed prices and the cooling of water temperatures in the Northern Hemisphere, which will help mitigate disease challenges in farming.