Morpol’s earnings this last quarter are up €13.8m on the same period a year ago, with both processing revenues and farming balancing lower sales volumes.
It reported pre-tax earnings of €11.7m for the second quarter as compared to a minus figure of €2.1m in 2010.
Morpol’s new salmon farming venture appears to continuing to be working well, giving a boost of €34.6 million to operating revenues that were significantly above prior year at €113.7 million, which stood at €83.4 million.
Salmon raw material prices dropped significantly from their recent pitch, which meant there was more room for earnings for processing, which came to €2.6m.
However, higher prices for the goods resulted in lower demand, felt in a decrease in volume of 11% from prior year levels, which, however, was ameliorated a little by incremental price increases over the last year.
"Even though salmon raw material prices are dropping they still remained high on average in the quarter - we had a strong result from the farming operations and expect that the second quarter will be a turning point in the results of processing. The lower salmon prices are expected to increase processing margins for the rest of the year," said Jerzy Malek, CEO. "Despite a reduction in demand and lower volumes we expect sales to pick up as retail prices decrease," concluded Mr Malek.
In July 2011 Morpol sold off its sea bass and sea bream operations in Spain to Canadian firm Cooke Aquaculture for a total enterprise value of €48.7m. The transaction will reduce Morpol's net debt by approximately €40m.
The company had a net interesting-bearing debt of €186.3m at the end of the second quarter, a decrease of €12.8m from the first quarter 2011.
