However, BioMar reported a record bottom line overall, with “significantly improved” earnings before interest and taxes (EBIT) last year compared to the prior year - from DKK 447m in 2015 to DDK 581m in 2016.
It also said it saw stronger cash flow from operations in 2016.
The feed manufacturer faced difficulties and a lack of volumes in some of its key markets last year, especially in Chile due to the algae bloom and strikes in that South American country.
However, it said sales to North Sea salmon farmers and in the European, Middle East and African (EMEA) region compensated for the decline in Chile. It saw increases in EBIT in Norway driven by volumes and functional feed sales.
Platform for growth
Carlos Diaz, BioMar CEO, said the company established a platform for future growth and profitability in 2016, with new capacity in Norway, Turkey and China:
“First of all we opened our factory in Turkey, now being directly present in the second largest market in Europe. Secondly, we planted a solid footprint in China. We started the construction of a new factory in Wuxi and acquired another in Haiwei in the south of China. Thirdly, we are progressing as planned with the construction of a new line in Karmøy as well as additional logistic investments including our new gas-driven ship in order to increase flexibility – bringing the Norwegian capacity up to 600.000 tons.
“On top of these expansions we fortified our organization making us ready for the challenges of tomorrow. One example is building a global R&D center with a strong link to the business and with own high-end trial facilities in Europe as well as America.”
The group is optimistic about volume expectations in 2017 despite the challenging market conditions, forecasting sales of around DKK 9.4bn for 2017.
It also predicted the Chilean salmon market to fully recover.
Algae meal deal
Yesterday the Bunge and TerraVia, joint developers of an algae derived DHA ingredient for salmon feed, announced the expansion of a distribution agreement with BioMar. The Danish company told us it has already sold 40,000 tons of algae meal salmon feed incorporating that algae meal to farmers over the past six months.
The Danish feed producer operates 12 feed factories in Norway, Chile, Denmark, Scotland, Spain, France, Greece, Turkey and Costa Rica. It reported sales in around 80 countries and for more than 45 different fish species.
BioMar’s parent company is Schouw & Co, a group listed on the Copenhagen Stock Exchange.