Salmones Camanchaca's profits drop almost 90% in Q3

In the face of this drop in profits, on the positive side, the company increased its Atlantic salmon harvests by 24% and improved its biological indicators.
Salmones Camanchaca farm. Despite increasing its Atlantic salmon harvests by 24% and improved its biological indicators, the Chilean company's profits dropped almost 90% in Q3 2023.
Salmones Camanchaca farm. Despite increasing its Atlantic salmon harvests by 24% and improved its biological indicators, the Chilean company's profits dropped almost 90% in Q3 2023.Salmones Camanchaca.

In a context of higher costs, lower prices, and higher frozen production taking longer to register in revenues, Salmones Camanchaca has reported an EBITDA of only USD 2.9 million (EUR 2.6 million) in the third quarter of the year, which compares unfavorably with USD 25.6 million (EUR 23.5 million) in Q3 2022. Percentage-wise this translates into a drop of almost 90% of earnings, exactly 88.67%.

Undoubtedly, a setback for the Chilean salmon farmer that had closed this year's Q1 on a high note and with bright prospects, as its Vice President, Ricardo García Holtz, told WeAreAquaculture, and focused on continuous improvement at the close of Q2 2023.

"This was a very challenging quarter due to weak global demand and its effects on prices, coupled with costs absorbing higher feed input prices, inflation on services, and SRS and caligus outbreaks that hurt costs for fish harvested from two farms," Garcia Holtz now acknowledged.

However, in spite of the difficulties, García Holtz also wanted to highlight the positive side. "Despite this scenario, the production and commercial flexibility to focus on the most attractive formats and markets allowed our prices to exceed the reference prices," he said.

Increased harvest of Atlantic salmon generating more inventory

On a positive note, in this Q3 2023 financial results report, Salmones Camanchaca highlighted that its Atlantic salmon harvest had increased by 24% compared to Q3 2022, reaching 18 thousand MT WFE. However, the company then acknowledged that this volume did not fully materialize in sales in the period, generating an inventory of more than 9 thousand MT WFE at the end of the quarter. In addition to the 13% decrease in sales prices for this species, revenues for Q3 were 14% lower than in the same period of the previous year. Accumulated revenues were USD 259 million (EUR 238.1 million), 5% lower than those recorded as of September 2022.

As regards Coho salmon, despite having recorded a much higher sales volume at the end of September than in 2022 - 4,376 MT WFE compared to 1,821 MT WFE -, revenues were affected by 7% lower prices this year due to the higher Chilean supply and the strong devaluation of the Japanese currency, since Japan is the main market for this species.

Thus, in this context of lower prices and higher production of frozen products, which, as mentioned, take longer to be recorded as revenues, EBITDA for the third quarter of 2023 was only USD 2.9 million (EUR 2.6 million), almost 90% below the USD 25.6 million (EUR 23.5 million) of the same period of 2022.

"This Q3 2023 contains a negative effect on revenues of USD 2.5 million (EUR 2.2 million) due to a lower valuation of an inventory of 1,700 tons of finished product in Camanchaca's international offices, which have not yet been sold, mainly of the Coho species," stated the Chilean producer. Thus, the accumulated EBITDA at the end of September reached USD 32.6 million (EUR 29.9 million), lower than the USD 55 million (EUR 50.5 million) in 2022, 40.73% less than last year.

Improvement in biological indicators

As explained by the Vice President of Salmones Camanchaca, Ricardo García Holtz, the company recorded incidents of widespread SRS and caligus outbreaks in two farms, and that harvest represented 70% of the third quarter. Added to this were the high prices of salmon inputs in 2022 and early 2023, which increased the costs of harvested Atlantic salmon by 12% in this quarter, and by 10% in the nine months of the year.

However, this Q3 2023 also saw an improvement in the biological indicators for the last 12 months, with a 52% reduction in the use of antibiotics and 38% in the use of antiparasitics, as well as a 4% improvement in the biological conversion factor compared to the accumulated 12 months to September 2022, reaching 1.07 this year.

A fact that García Holtz highlighted. "Notwithstanding the challenges we have for the close of 2023, we are seeing good sanitary performance, somewhat less cost pressure for the early 2024 crops, and better prices for the following months," he stated.

Regarding the outlook for the coming months, the Vice President of Salmones Camanchaca said: "Possibly the main commercial objective is the sale of the Coho inventory, which we estimate will be larger at the end of this season in January 2024. And on the production side, it is to verify the benefits of the mitigation measures for oceanographic incidents."

About Salmones Camanchaca

Specializing in breeding, egg production and hatchery upgrading of Atlantic salmon, Coho salmon and trout, Salmones Camanchaca is a leading producer of salmonids from Chile to the world. The company also excels in primary and secondary processing and marketing, and in sales of premium salmon. With more than 30 years of experience, it has a strategic position in more than 50 international markets.

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