BioMar reports solid third quarter earnings
EBITDA for Q3 2023 jumped to DKK 470m (US$68m) from DKK 403m in Q3 2022, reflecting margin improvements relative to last year.
“So far, we have experienced a very satisfying 2023. Building upon a solid first half year, we have accelerated our sales and improved the results. We are looking at a very strong product pipeline,” commented CEO Carlos Diaz.
Based on that good momentum and solid outlook, the company is raising its full-year EBITDA expectations for 2023 to a 1,150-1,190m range from the previous DKK 1,080-1,150m.
“This will be a record result," added Diaz, who said the global team had managed to turn a challenging year with volatile raw material prices into a successful one.
One of the world’s largest manufacturers of feed for the global fish based aquaculture and shrimp farming industries, BioMar's salmon division saw an improvement in volume sales in the quarter.
"Improvements in the Norwegian market helped to strengthen the division’s earnings,” noted the interim report from BioMar’s parent group, Schouw & Co.
The core business areas for BioMar are feed for salmon and trout as well as shrimp, sea bass and European bass. Innovation is an integral part of its business model, coupled with a focus on sustainability.
Regional developments
The EMEA division reported volume sales slightly below the level of Q3 2022 but also increased revenue driven by the Mediterranean region.
The company’s LatAm business saw substantial improvements in both volume sales and revenue in Q3. “Earnings improved thanks to stronger contract positions in a market otherwise challenged by low prices on farmed shrimp.”
It has added new production capacity in the Ecuadorian market.
Operations in its tech division, which was established after the acquisition of AQ1, reported a slight drop in earnings in Q3. “While there has been sound market interest in the technology solution, the division [sees that] customers are to some extent holding back on their investments, as they are feeling the effects of the current low farmed shrimp prices."
Feed demand
Over the coming quarterly periods, the parent group stressed that a key objective will be to bring more stability and predictability to the feed market and where possible to capitalise on the downward trends in prices of raw materials. “In addition, BioMar will be strongly focused on delivering on the company’s sustainability ambitions.”
Schouw & Co said long-term demand for farmed fish and shrimp appears robust. “In the short term, demand for feed is likely to be affected by current market conditions and by selling prices of farmed fish and shrimp.”
