Marine Harvest sees demand and disease boosting salmon prices

Austevoll Seafood ASA

31/10/2018 12:29

* Cuts global 2018 output forecast, sees limited 2019 growth
    * Strong demand and high prices seen
    * Q3 operating profit tops guidance, shares rise 1.8 pct

    OSLO, Oct 31 (Reuters) - Fish diseases and strong demand are
likely to limit salmon supplies and support prices into 2019,
the world's biggest fish farmer Marine Harvest  MHG.OL  said on
Wednesday, as it reported a record quarterly profit. 
    The Norwegian company, which has production in Chile,
Scotland, Ireland, the Faroe Islands, Iceland and Canada as well
as Norway, said it now expected global salmon supplies to rise
4-5 percent this year against 5-7 percent previously. 
    It sees supplies next year increasing 1-6 percent.
    "Our growth numbers for the industry are a little bit lower
than Kontali's (a leading Norwegian researcher). Why? We are
looking at the biological issues we are facing, so we expect
modest growth in Norway," chief financial officer Ivan Vindheim
said at the third-quarter results presentation.
    Sea lice levels have risen in Norway in the second half of
this year, leading to earlier harvesting, lower weight of the
fish and higher mortality rate.
    Marine Harvest now expects Norway, which produces about half
of the world's salmon, to increase output by 4-5 percent this
year, down from 6-9 percent previously. 
    For next year, it sees Norwegian output in a range of down 1
 percent to up 3 percent.
    In contrast, production at the world's second biggest salmon
producer Chile is recovering at a double digit percentage rate,
and that is expected to continue in 2019, Marine Harvest added.
    As demand is strong, Vindheim said he expected a shortage of
fish in 2019. Europe is by far the biggest market for Norwegian
salmon, although China, Brazil and the United States had the
fastest growth rates at above 10 percent in the third quarter.  
    Marine Harvest's operating profit rose to 207 million euros 
($235 million) in the quarter from 194 million in the same
period last year,  above its preliminary guidance of 204 million
euros.
    "There is strong consumption and good demand in all markets,
if you have good products it shows people are willing to pay for
good products," chief executive officer Alf-Helge Aarskog said.
    The average market price for salmon was 5.72 euros per kilo
in Norway in the third quarter. The 12-month forward price on
Nasdaq is currently 6.8 euros per kilo.   
    At 1145 GMT, Marine Harvest's shares were up 1.8 percent at
205.1 Norwegian crowns.
    ($1 = 0.8821 euros)

 (Reporting by Ole Petter Skonnord; Editing by Mark Potter)
 ((Olepetter.skonnord@thomsonreuters.com; +47 918 666 70;
Reuters Messaging:
terje.solsvik.thomsonreuters.com@reuters.net))