Despite a major fall in profits for the second quarter of this year at Marine Harvest Ireland, a spokesman for the company said that by year end they expect to reverse that trend.
Jan Feenstra, Managing Director at Marine Harvest was responding to reports at the weekend that profits at the company’s Irish division fell in the second quarter of 2016 to €1.3m from €6.2m a year earlier.
Mr. Feenstra said he expects that profits at the fish farm operation will be restored by the end of the year and says the financial report for one quarter of the year is taking their financial status and projections ‘out of context’.
Marine Harvest based on the Fanad Peninsula has 300 employees and historically this is its highest number ever in Ireland.
Referring to the bad weather and biological conditions experienced in the recent past, Mr. Feenstra told the Tirconail Tribune that these factors continued to impact on its operations here.
“The other major factor,” he said, “ are the long delays in the granting of marine licenses to the company to allow us expand our operations and this situation has been ongoing for many years.”
In the company’s Ireland division, costs were up 12% from “very challenging weather conditions, hampered feeding and biological challenges,” said their latest financial statement.
As a result, operational earning for Ireland before interest and tax fell to €1.3 million, compared to €6.2 million in Q2 of 2015.
However Mr. Feenstra said that while that might sound serious, the period concerned is their quietest of the year and they still hope to be on budget targets by the end of 2016.
He said they are facing into the busiest four months of the year leading up to Christmas when their smoked salmon sales come in the equation and is a main driver of business and profitability. This, he said is the period that creates 60% of their turnover and he is confident that the losses for quarter three will be reversed before year end.
Saying that bad weather which cut their feeding days drastically last year and led to the shutdown of operations is the main factor in the current financial predictions along with the lack of enough sites at sea to promote their business and grow profits.
Marine Harvest reported revenues of €832 million, up 8.47% year on year. Despite these bumper results, Alf-Helge Aarskog, CEO, expressed concern on the company’s costs.
“Despite all time high salmon prices, farming costs have become unacceptably high and the cost trend is not satisfactory,” he said, in a statement on the results.
“Compared to the second quarter of 2015, costs are up in all regions. Marine Harvest continues to have the utmost focus on cost reduction throughout the organisation and supports new methods and innovative solutions to combat the cost escalation,” said Aarskog.
Estimated volumes for the second half of 2016 have been reduced as a result of biological issues, the company said.
Marine Harvest has fish farms in Norway, Scotland, Ireland, Canada, Chile and the Faroe Islands.
Internationally Marine Harvest’s group operational revenue jumped to €832.1m in the second quarter, from €767.3m in the second quarter of 2015. Its operational earnings before interest and tax was €149m in the second quarter this year.
And while Marine Harvest said that salmon prices have risen to an unprecedented level, its business in Ireland has lagged that in other regions.
Salmon prices rose 55% in Europe and by 43% in the Americas in the period.
“The effects of very challenging weather conditions, hampered feeding and biological challenges from the first quarter continue to impact costs,” said Marine Harvest of its Irish operations.
Originally known as Fanad Fisheries, Marine Harvest Ireland operates in five counties on the west coast of, from Donegal to Cork and Kerry in the southwest of the country.
Established since 1979 the company has been operating locally in Mulroy Bay and Lough Swilly and is the largest employer in this part of county Donegal.
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