NORWEGIAN fish farming business Marine Harvest saw a small rise in its third-quarter Scottish harvest although thanks in part to sterling’s weakness the profitability of its Scottish arm improved markedly.
In a trading update the Bergen-headquartered salmon business said that it harvested 11,000 tonnes of fish from its Scottish farms in the three months to the end of September, representing a rise of one tonne on the same period in 2016.
The profit generated in the Scottish part of the business increased by over 300 per cent year on year, with earnings before interest and tax (EBIT) rising from €5.9 million in the third quarter of 2016 to €25.3m this year.
On a per kilogramme basis EBIT was up from €0.60 last year to €2.30, in part reflecting the relative weakness of the pound against the Norwegian krone during the period.
While this helped reduce the company’s cost base in Scotland, Marine Harvest has also overcome teething problems that dogged its Rosyth-based fish factory following its 2015 launch.
In its update for the third quarter of last year the business said that biological challenges such as sea lice had contributed to “a high cost level for salmon of Scottish origin”.
In its annual report for 2016, Marine Harvest said that sea lice was a particular concern for the business that had led to “an increased use of antibiotics or other medicines, including medication to combat sea lice, the industry’s main challenge at present”.
“Biological challenges, especially related to sea lice and gill issues, caused increased costs and reduced survival in both 2016 and in 2015,” the report added.
In its update for the second quarter of this year, however, the company noted that the work it was doing to “reduce the sea lice load in all farming units”, including non-medical treatments, had resulted in lower sea lice levels in Scotland.
While enjoying a cost reduction as a result of that, the Scottish part of the business has also benefited from being able to charge higher prices for some of the products produced here.
“The Rosyth plant in Scotland delivers a set of pre-packed and convenient products into the UK market,” the company said in its update for the second quarter of this year.
“It is well past the start-up challenges experienced in 2016, and yield performance has returned to benchmark levels. This means that more salmon is sold at a premium price.”
Looking across the business as a whole, Marine Harvest produced a total of 95,500 tonnes of fish in the third quarter, which was five per cent lower than the 101,000 it had been forecasting at the end of the second quarter.
Operational EBIT for the business as a whole was €191m for the quarter, up from €180m in the same period last year, with the Irish business producing the highest EBIT on a per kilogramme basis.
Marine Harvest Ireland, which is the only producer of organic salmon in the group, had EBIT per kilogramme of €3.20 for the quarter meaning the Irish part of the business contributed €9.6m of total earnings.
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