Camanchaca posts positive Q3, reversing prior year’s losses

Santiago, Chile-based salmon farmer Salmones Camanchaca has posted increased revenue, positive net profit, and positive earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q3 2021, a turnaround from losses in 2020.

Camanchaca posted a net profit of USD 4.57 million (EUR 4.03 million) in the third quarter of 2021, versus a Q3 loss of USD 9.53 million (EUR 8.42 million) in the same quarter last year.

“[It's evidence] that we are leaving behind the very weak results we had as a result of the fall in demand due to the pandemic and the impacts of algae blooms from a very dry and sunny summer," Salmones Camanchaca Vice Chairman Ricardo García said in the company's Q3 report.

At the beginning of 2021, two algae bloom incidents  affected Camanchaca's operations in Reñihue fjord and Comau fjord, resulting in mortalities and a diminution of the company’s harvest capacity and sales volume. García said the companyis recovering from the setback and expects its margins to normalize in the coming months.

Camanchaca's operating revenue increased 19 percent to USD 65.9 million (EUR 58.2 million) during the quarter, compared to USD 55.2 million (EUR 48.7 million) in Q3 2020, while its cost of sales increased 6.1 percent to USD 62.3 million (EUR 55 million).

Camanchaca's third-quarter EBITDA came in at USD 3.6 million (EUR 3.1 million), compared with losses of USD 3.7 million (EUR 3.26 million) in the same quarter last year. Operational EBIT before fair value adjustments in the quarter represented a loss of USD 500,000 (EUR 440,000), compared with higher losses of USD 7.6 million (EUR 6.7 million) in Q3 2020. García attributed the turnaround mainly to higher prices, which jumped 48 percent year-over-year.

“The company experienced good price realization during the period, capturing market price increase with value-added product strategy," the company said in its results. "This increase was offset by high contract share limiting volumes available for spot exposure."

Harvest volume fell 19 percent the third quarter of 2021 to 9,508 metric tons (MT) whole-fish equivalent (WFE), with an average weight of 4.2 kilograms. Harvest costs for the quarter came in at 36 percent above Q3 2020 at USD 4.18 (EUR 3.69) per kilogram live weight, due mainly to harvest from sites in Reñihue continuing to be affected by severe feeding limitations and high mortalities due to algae blooms. However, Camanchaca said that there was a gradual improvement in costs during the period after having completing harvests at all its Reñihue sites in August. Compared to the previous quarter, costs were actually down USD 0.74 (EUR 0.65) per kilogram, and the company expects to see continued cost reductions, with a return to normal during Q1 2022.

Salmones Camanchaca said its full-year 2021 Atlantic salmon harvest estimate remains unchanged at 40,000 to 41,000 MT WFE, and 46,000 to 48,000 MT for 2022. It had previously estimated 2021 production at between 42,000 to 43,000 MT WFE, including coho. It also previously said it eventually expects to reach up to 70,000 MT in annual production.

The company said its shareholders’ approval of a capital increase of up to USD 30 million (EUR 25.8 million) will support its 2022-2023 investment plan. That plan calls for increasing water-renewal and -circulation at its farming centers, the implementation of a series of risk-mitigation technologies, the recoverery of the biomass it lost in the first half of 2021, and the strengthening the company's overall financial position. The placement is expected to be completed by the end of 2021.

Improving results and normalizing margins “is especially pertinent in light of the capital increase that Salmones Camanchaca is preparing, and whose controlling shareholder has declared that it will subscribe and pay,” García said.

Salmones Camanchaca is a vertically and fully integrated salmon producer, with operations in farming, processing, marketing, and selling salmonids. It harvested 53,000 MT WFE from its core business of Atlantic salmon farming in 2020, and it has ventured into coho salmon farming with plans to replace Atlantic salmon at its farming centers in the Los Lagos Region, as it harvests coho before Chile's summer – when the risk of blooms increases due to higher water temperatures.

It recently announced it expects to harvest between 8,000 and 9,000 MT of antibiotic-free salmon annually by 2024, as the company attempts to cater to more discerning markets.

Salmones Camanchaca said the antibiotic-free product is highly appreciated by consumers mindful of nutritional foods that protect the immune system – particularly in markets such as Japan, which makes up between 80 and 90 of the company's demand for this produce. Camanchaca said it expects to further promote the new product in the United States, where it markets its mass-consumption brand Pier33.  

Photo courtesy of Salmones Camanchaca