Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mowi ASA (MHGVY, Financial) achieved record high operating revenues of EUR1.44 billion in the third quarter, driven by all-time high quarterly harvest volumes of 161,000 tons.
- The company expects to harvest 520,000 tons next year, marking a significant step towards their 2029 milestone of 600,000 tons, indicating strong growth prospects.
- Mowi ASA (MHGVY) has consistently outperformed the industry in volume growth, with a 4.8% growth rate compared to the industry's 2.7% over recent years.
- The company reported a strong balance sheet with a healthy equity ratio of 48% at the end of the quarter.
- Mowi ASA (MHGVY) declared a quarterly dividend of 1.50 NOK per share, reflecting confidence in their financial stability and future prospects.
Negative Points
- Prices in the third quarter were relatively soft due to seasonal high industry supply, impacting overall profitability.
- The company's realized blended farming costs were higher than expected at EUR5.72 per kilo, influenced by seasonal issues and record high sea temperatures.
- Soft prices in the Americas and biological challenges in regions like British Columbia negatively impacted profits in those areas.
- The weakening of the Norwegian Kroner resulted in an FX hit, costing Mowi ASA (MHGVY) EUR18 million in the third quarter.
- There is uncertainty regarding future biological challenges, such as string jellyfish and winter wounds, which could impact future production and quality.
Q & A Highlights
Q: What are your expectations regarding downgrades or superior share for the coming winter due to string jellyfish and winter wounds?
A: Ivan Vindheim, CEO: It's uncertain, and no one knows for sure. So far, there have been a few cases, but nothing significant. The situation is being monitored, but future developments are unpredictable.
Q: How will sea lice treatments in Northern Norway impact the wound situation and downgrades in the coming winter?
A: Ivan Vindheim, CEO: It's not positive, but other measures have been taken. The net effect is hoped to be better than last year. Handling fish more often can lead to more biological issues, which is a challenge in biological production.
Q: What is the potential drop in feed prices based on recent ingredient price trends?
A: Ivan Vindheim, CEO: We don't guide on future costs as it depends on biological costs. While input factors may drop, biological issues can offset these benefits. We hope for improvements next year to fully benefit from lower input costs.
Q: Why is Mowi's growth in Norway expected to be higher than the industry average?
A: Ivan Vindheim, CEO: Mowi has consistently outgrown the industry for years, and the plan is to continue this trajectory. Achieving growth requires investments, focus, and a supportive organization.
Q: With new growth targets and healthy profits in feed and consumer products divisions, is the net interest-bearing debt target up for revision?
A: Ivan Vindheim, CEO: Yes, if we continue to grow the business and cash flow, we can handle more debt and increase dividend capacity. Everything is interconnected.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
