Disease and parasites hit fish farmer Marine Harvest

Austevoll Seafood ASA

22/08/2018 10:43

* Cuts 2018 output forecast by 5 pct
    * Shares fall 2.9 pct
    * Rivals Grieg and Leroey also suffering

    By Ole Petter Skonnord and Terje Solsvik
    OSLO, Aug 22 (Reuters) - Marine Harvest  MHG.OL , the
world's largest fish farmer, cut its 2018 output forecast by
five percent on Wednesday, blaming industry-wide problems with
disease and parasites.
    Salmon pens in Norway, Scotland and Canada have been hit by
sea lice, heart failure, pancreatic disease and other illnesses,
the company said, while in Chile hundreds of thousands of salmon
escaped from cages during a storm.  urn:newsml:reuters.com:*:nL1N1UX1LO
    The Oslo-listed company now expects to produce 380,000
tonnes of salmon this year, down from the 400,000 tonnes it
forecast in May and below the average estimate of 404,000 tonnes
 in a Reuters poll of analysts.  urn:newsml:reuters.com:*:nL8N1VB1U0
    While outbreaks of disease and lice are common in the
industry, the size of the output cut took analysts by surprise.
    "We had expected lower volume guidance, this cut is however
much higher than expected," brokerage Nordea Markets wrote in a
note to clients, adding it would reduce its forecast for
full-year operating earnings by 3-5 percent.
    Competitor Grieg Seafood  GSFO.OL  also scaled back its 2018
production plan on Wednesday, while Leroey Seafood  LSG.OL 
missed second-quarter earnings forecasts. 
    At 0910 GMT, Marine Harvest's shares were down 2.9 percent,
while Grieg was down 5.4 percent and Leroey down 2.8 percent.
    Marine Harvest's second-quarter operating earnings came in
at 175 million euros ($200 million), in line with the company's
preliminary report released in July.
    "Although second quarter numbers are in line, outlook for
the remaining year is on the weak side," Sparebank 1 Markets
said, adding full-year earnings forecasts would be lowered.
    Grieg Seafood blamed the cut in its production forecast on
an outbreak of pancreatic disease in Norway and of algal bloom
in Canada. Algae can damage fish gills. 
    Still, the companies said demand for salmon remained solid,
with prices likely to recover from a recent slump. Consumers are
looking for healthier sources of protein, with many turning to
salmon. 
    "It's an extremely strong market," Marine Harvest Chief
Executive Alf-Helge Aarskog said. "I expect a very good year
next year as well," he added.
   ($1 = 0.8744 euros)

 (Editing by Gwladys Fouche and Mark Potter)
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70; Reuters
Messaging: terje.solsvik.thomsonreuters.com@reuters.net))