Fisheries outperformed aquaculture in Blumar's 2023 results

The increase in the jack mackerel quota in Chile was decisive for the good results of the Chilean seafood company's fishing segment.
Fisheries accounted for 46% of Blumar's consolidated revenues in 2023, surpassing aquaculture, which last year exhibited a challenging scenario.

Fisheries accounted for 46% of Blumar's consolidated revenues in 2023, surpassing aquaculture, which last year exhibited a challenging scenario.

Photo: Blumar Seafoods.

In fiscal 2023, fisheries outperformed aquaculture at the Chilean fishing and salmon company Blumar. With consolidated revenues of USD 674.4 million (EUR 622.2 million), 2% more than in 2022, the figure reflects the good performance of the fisheries segment, which last year grew by 20% over 2022, reaching revenues of USD 308.6 million (EUR 284.7 million).

All eyes on Chile's new Fisheries Law

Blumar pointed out that one of the factors that most directly influenced this improved performance of the company's fishing segment was the sustained increase in the jack mackerel quota allocated to Chile. Just between 2022 and 2023, it increased by 23.4%, consolidating the country's competitive position and allowing Blumar's production of frozen jack mackerel to increase by 20% at the end of 2023 compared to 2022. In total, fishing accounted for 46% of the company's consolidated revenues.

"The fishing segment is in a good moment, with good prices and with a lot of projection to continue enhancing products for human consumption, which is a huge opportunity for regional development," Blumar CEO Gerardo Balbontín said in this regard. "Fishing was the second fastest growing activity in Chile in 2023 and, therefore, we believe that the focus should be on having a good Fisheries Law, which enhances all the attributes that the country has as a sustainable fishing power," he added.

Balbontín's analysis coincided with that of Ricardo García, CEO of its competitor Camanchaca, who a few days ago also called for the legislative discussions on Chile's new Fisheries Law to be "moderate and based on facts and reason, respecting the rights of the people," in order to achieve a good rule. Moreover, just like Blumar, in its Q4 2023 report, Camanchaca also acknowledged that it was its fishing division that had saved its revenues in 2023.

A challenging scenario for the aquaculture segment

Regarding the aquaculture segment, it accounted for 54% of Blumar's revenue in 2023, but, as the company points out in its release, it "exhibited a more challenging scenario." At year-end, it reached USD 365.9 million (EUR 337.6 million) in revenues, down 8% from the previous year.

The increase in salmon production costs - 14% higher for Atlantic salmon in 2023 compared to 2022 - impacted the segment's EBITDA and, as a consequence, also the company's consolidated EBITDA, which was USD 91.1 million (EUR 84 million), 29% lower than in 2022. During the year, the company recorded net earnings of USD 13.1 million (EUR 12 million).

"We have faced important challenges in the aquaculture segment, mainly due to the increase in the cost of feed and inflationary pressure in several other costs, but we are addressing them in different ways and focused on recovering the competitiveness of the segment, through greater efficiency, cost reduction and the incorporation of technology," stated Gerardo Balbontín.

Investment to maintain operating level

Efficiency, cost reduction, technology. "Part of that is what we did by incorporating a new fish farm and the implementation of a remote feed room, which will allow us to generate savings in salmon feed, which is one of the most important costs for the operation," continued Blumar's CEO.

Last year, the Chilean seafood company made investments worth USD 35.6 million (EUR 32.8 million) focused on maintaining its operational level, growing its fishing production capacity, and also acquiring an open-flow fish farm. Located in the Los Lagos region, the 'Piscicultura Puyehue' (Puyehue Fish Farm) will initially provide 30% of the company's smolt requirement, which is equivalent to around 5 million fish per year.

The remaining profit and loss for the period amounted to USD -11.1 million (EUR -10.3 million) compared to the previous year. According to Blumar's statement, this amount corresponds mainly to casualty losses and includes the loss associated with the algal bloom that affected the Victoria farm in the last days of December 2023. At the time the company valued it at USD 8.5 million (EUR 7.8 million) but, finally, a provision of USD -8.8 million (EUR -8.1 million) has been established.

Commitment to Magallanes region development

To conclude - and although it was an event that did not occur in the reported period but in February of this year -, the company dedicated the last part of its release to comment on the setback suffered by the Entrevientos facility. The salmon processing plant, the most modern in the country, which Blumar operated jointly with MultiX, was affected by a fire that totally destroyed it.

As a result, the company announced the impossibility of maintaining the continuity of jobs at the plant located in Punta Arenas, Magallanes, in southern Chile. Therefore, a few days after the fire, Entrevientos announced that, since the closure was due to force majeure, it would compensate the workers beyond what is established by law. Thus, the company designed a plan to guarantee the financial stability of the employees and their families by defining voluntary severance payments.

"Entrevientos incident is a painful event, which impacted more than 750 jobs and meant a significant cost for the company," said Blumar's CEO. "We faced this with responsibility, we put people at the center and generated an exit plan that involved voluntary indemnities and other aid aimed at mitigating the situation. In addition, we are working on various plans to maintain operational continuity in Magallanes, seeking the best formulas to continue promoting the development of this territory," he concluded.

About Blumar

With over 60 years of experience in the industry, Blumar Seafoods is a company dedicated to fishing and aquaculture which has excelled in the development of quality products while maintaining harmony with the environment. Its fishing products are frozen jack mackerel for human consumption and fishmeal and fish oil for use in animal feed. In aquaculture, Blumar produces premium quality Atlantic salmon and Coho salmon.

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