Profits evaporate for Chilean salmon farmer as costs bite
Lower prices and increased costs lead to ‘challenging’ quarter.
Chilean salmon farmer Salmones Camanchaca faced a price drop in the third quarter, resulting in a decline in operating revenue despite higher harvest volumes.
Lower prices and increased costs were identified as key factors contributing to this situation.
The company reported Atlantic salmon harvest volumes of 17,760 metric tons, a 24% increase compared to Q3 2022, in line with its harvesting plan. Sales did not reflect this increase, with September ending with Atlantic salmon sales volumes of 11,311 metric tons (WFE) and inventory exceeding 9,000 tons (WFE).
Salmones Camanchaca Vice Chairman Ricardo García laid the blame on low demand.
“This was a very challenging quarter due to the weakness of global demand and its effects on prices, added to costs that absorbed the higher prices of raw material inputs for feed, inflation on services, and Salmon Rickettsial Syndrome (SRS) outbreaks and sea lice presence that affected harvested fish costs from two sites.”
Salmones Camanchaca’s operating revenue for the quarter totaled $82.1 million, marking a 14% decrease from Q3 2022. The decline was primarily attributed to lower prices, which dropped by 13% for Atlantic salmon and 24% for Coho salmon compared to the same period last year.
The cost of harvested Atlantic salmon (ex-cage live weight) increased by 12% to US $4.69/kg, mainly due to outbreaks of SRS and sea lice presence at two sites, resulting in higher treatment costs.
EBIT per kilogram for both Atlantic and Coho salmon plummeted during the period. For Atlantic salmon, it was $0.005 this year, down from $1.78 a year ago, and for Coho salmon, it was minus $0.54 per kg, compared to a positive $1.16 in Q3 of the previous year.
Looking ahead, the company expects Atlantic Salmon harvest volumes for this year to be between 44,000 and 46,000 metric tons WFE, with Coho salmon harvest volumes ranging from 10,000 to 12,000 tons WFE.