Mowi CEO Ivan Vindheim, pictured at the North Atlantic Seafood Forum in March 2024.
Photo: NASF 2024.
"This was yet another good quarter for Mowi, with our best ever seawater production and harvest volumes of 161,000 tonnes. We've never had more fish in the sea, with biomass in sea up 4.4% year-on-year at quarter end." This is how CEO Mowi, Ivan Vindheim, assessed the company's Q3 2024 results presented today.
Not the only record for the salmon giant in the third quarter, Mowi also generated record operating revenues of over EUR 1,440 million. This was specifically EUR 1,443.7 million (USD 1,544 million), 6.26% more than in Q3 2023. This translated into an operating profit of EUR 173 million (USD 185 million), which is precisely the thorn in the side of its remarkable results.
That operating EBIT of EUR 173 million is almost 15% lower (-14.8%) than in the same quarter of 2023 when it reached EUR 203.1 million (USD 217.2 million). According to Mowi's Q3 2024 report, the effects of record high volumes and stable costs were offset by lower prices, negatively affected by seasonally high industry supply and lower seasonal demand in the USA.
After reporting "all-time high" harvest volumes in the third quarter in its mid-October trading update, Mowi's record volumes came as no surprise. The 161,000 gutted weight tons (GWT) announced then has ended up materializing at 161,020 GWT, in line - albeit slightly ahead - of the company's previous forecast of 159,500 GWT for the period.
The world's largest salmon producer is therefore well positioned to meet its 2024 harvest volume guidance, which marks a milestone of 500,000 tons. Moreover, the record biomass at sea supports the 2025 volume guidance of 520,000 tons, an amount representing a growth of 145,000 tons from 2018, equivalent to 4.8% CAGR (Compounded Annual Growth Rate) compared to the 2.7% average for the industry.
That planned volume for 2025 is also the first step towards Mowi's next milestone of harvesting 600,000 tons of salmon, planned for 2029. As announced in September during its Capital Markets Day, the Norwegian salmon giant will base its strategy for the next five years on three pillars: volume growth, competitive costs, and sustainability.
"It is a privilege to work in an organisation that is always striving to improve and take the company to the next level. We aim to continue growing faster than the wider industry, by expanding our use of post-smolt and through increased smolt release. We expect another year with limited supply growth for the wider industry at 2% or lower," Vindheim continued commenting on Q3 2024 results.
To achieve this, in addition to increasing volumes, the company is also counting on lowering - or at least optimizing - its farming costs, which in Q3, helped by lower feed prices and economies of scale at higher volumes, fell compared to Q1 - when elevated mortality from winter sores and jellyfish raised overall costs in Norway - and Q2.
The company expects the downward trend in feed prices to contribute to an even greater reduction in costs, which will also benefit from savings throughout the value chain thanks to the ambitious cost improvement plan that the salmon company presented at the aforementioned Capital Markets Day, following the one it already implemented in 2018. The aim is to reduce costs by EUR 300-400 million (USD 334-446 million) over the next five years.
In this Q3 2024 results presentation, Mowi also highlighted that the continued growth of its growing operations in turn fueled the growth of the company's other two divisions: Consumer Products and Feed.
Thanks to good operating performance, high volumes, and seasonally lower raw material prices, Mowi Consumer Products, the group's value-added business, achieved record results in the third quarter with the best operating EBIT ever, EUR 43.5 million (USD 46.5 million). Volumes reached 65,005 tons of product weight, driven by good retail volumes in Europe.
"We see good retail demand for our products, and expect demand in the restaurant sector to improve as consumer purchasing power increases fuelled by falling interest rates and rising wages," CEO Ivan Vindheim said.
For its part, Mowi Feed delivered the best quarterly result ever, on all-time high earnings and record-high volumes, with record operating EBITDA of EUR 25.2 million (USD 26.9 million) and volumes sold of 191,279 tons, up 22,000 tons or 13.2% from Q3 2023. The salmon company explained that this positive volume development was driven by good seawater growth and demand from its Farming division.