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Morpol Sales Price Increases Lagged Behind Raw Material Price Increases

16 May 2013

POLAND - Morpol's consolidated operating revenue in Q1 2013 amounted to €128.2 million, which was higher by €9.0 million in comparison to operating revenue generated in the same period last year.

Operating EBIT for the quarter amounted to €5.2 million, which was €14.9 million lower versus the same period last year and €1.6 million higher versus Q3 2012.

The group's net interest bearing debt (NIBD) was €188.0 million at the end of Q1 2013 (€0.8 million increase compared to 2012 year end). The equity ratio was 39.5 per cent at quarter end compared to 40.8 per cent at the quarter end prior year.

Processing

Operating revenue in processing was €119.9 million compared to €97.9 million prior year.Volume excluding contract processing was up strongly (21 per cent ) in comparison to Q1 2012. The increase in sales prices has also positively impacted the growth of sales revenues.

Operating EBIT for processing in Q1 2013 was €11.4 million vs. €9.1 million in the previous year. Significant higher raw material unit purchase price accounted for €20.5 million of the loss of margin compared to the same period in the prior year.

Salmon farming

Operating revenue in salmon farming in Q1 2013 was €27.5 million (€31.6 million in same period last year). Volumes sold were lower by 34 per cent in comparison to the same period last year. Of the total revenue, €19.1 million was transferred internally for further processing and sales.

Salmon farming operating EBIT in Q1 2013 was €6.2 million (€2.3 million same period last year), resulting in an operating EBIT margin of 22.6 per cent (Q1 2012: 7.2 per cent ), which resulted in €1.3 operating margin per Kg harvested.

Cash Flow

The consolidated cash flow for Q1 2013 was an ouflow of €4.4 million from financing and investing activities, which outweighed the inflow from operating activities. The consolidated cash flow from operating activities for Q1 2013 was an inflow of €8.4 million.

During the quarter, the Morpol Group invested €9.8 million in property, plant and equipment and intangible assets out of which €7 mln accounts for development in the processing business units and the rest of the amount is attribiutable to farming.

"It was an extremely challenging quarter for our Processing division as the price increases that we implemented during the period were insufficient to compensate for the steep rise in raw material prices. Consumer prices do not yet reflect the raw material price level leading to strong demand in our sector. We expect that this trend will not continue going forward as consumer prices will be adjusted to a level that will inhibit demand growth. Morpol will vigorously pursue our strategy of profitable growth." says John-Paul McGinley.

TheFishSite News Desk



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