Undercurrent News, 22 Oct 2014: Marine Harvest takes hit from sea lice extraordinary mortality costs

Marine Harvest takes hit from sea lice extraordinary mortality costs

Undercurrent News, 22 Oct 2014

Sealice mitigation and extraordinary mortality shaved NOK 156.5 million ($23.7m) off Marine Harvest’s profit in the third quarter of the year.

The world’s largest salmon farmer said sealice mitigation in Norway cost it NOK 91.8 million in the quarter, taking the total costs so far this year to NOK 238.2m ($36.1m).

The group also incurred NOK 64.7m in costs from ‘exceptional mortality’ in Norway, Scotland, Canada and Chile.

Despite these one-off costs, the group’s earnings before interests and taxes for the quarter were still up 15% year-on-year, to NOK 912m.

Marine Harvest had warned of these costs a week ago. At the time, Undercurrent reported that the costs were likely linked to due to the algal bloom in Canada.

However, the quarterly report shows this is not the case.

Instead, as can be seen on the table below, over a third of those costs (NOK 26.6m) were incurred in Norway, a three-fold increase year-on-year.

This was partly due to pancreas disease, and cardiomyopathy syndrome (CMS), which cost the group NOK 9m in the quarter.

“Non-seawater costs in the quarter were reduced compared to the same period in 2013, due to increased volume (scale effects), but this was offset by increased mortality costs mainly due to treatment losses in connection with lice treatment,” wrote Marine Harvest, referring to its Norwegian operations.

“Treating for sea lice is challenging in periods with high sea water temperatures.”

Scotland, Ireland: Algae and jellyfish impact survival during delousing

Marine Harvest also incurred costs of NOK 13.4m in Scotland, due to jellyfish and algae.

“The biological situation was challenging also for our Scottish operations in the third quarter,” wrote the company.

“Losses were recorded at several sites as compromised gills from jellyfish and algae, resulted in reduced survival during lice treatments.”

“Some of the challenges have continued into October, but lower seawater temperatures will reduce the pressure from water–borne issues (algae and jellyfish) in the fourth quarter. Sea lice remain the main biological challenge.”

Algal bloom also impacted farms in Ireland, incurring losses of NOK 4m.

Chile, Canada: Mass mortality at smolt site

In Chile and Canada, the group incurred costs of NOK 6.1m and NOK 5m respectively due to deaths at smolt facilities

“We experienced mass mortality at a smolt production unit in the third quarter,” wrote the group, commenting on Chile.



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