Mowi ASA (MHGVY) Q1 2025 Earnings Call Highlights: Record Profits Amidst Industry Challenges
Operational Revenue: EUR1.36 billion for Q1 2025.
Operational Profit: EUR240 million for Q1 2025.
Harvest Volumes: 108,000 tons, up 12% year-over-year.
Farming Costs: EUR5.89 per kg for Q1 2025.
Dividend: NOK1.70 per share for Q1 2025.
Cash Position: EUR1.88 billion at the end of Q1 2025.
Earnings Per Share: EUR0.29 for Q1 2025.
Return on Capital Employed: 16% for Q1 2025.
Norway Operational Profit: EUR155 million with a margin of EUR3.51 per kg.
Scotland Operational Profit: EUR32 million with a margin of EUR1.78 per kg.
Chile Operational Profit: EUR12 million with a margin of EUR0.88 per kg.
Canada Profit: EUR4 million, improved from a EUR2 million loss in Q1 2024.
Consumer Products Operational Profit: EUR33 million, up from EUR24 million in Q1 2024.
Feed Volumes: 112,000 tons, up 14% year-over-year.
Feed Operational EBITDA: EUR7 million for Q1 2025.
Warning! GuruFocus has detected 4 Warning Signs with BOM:543573.
Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Mowi ASA (MHGVY) reported a record high operational profit of EUR 240 million for Q1 2025.
The company achieved an operational revenue of EUR 1.36 billion, with harvest volumes up by 12% year-over-year.
Mowi ASA (MHGVY) maintained a strong cash position with EUR 1.88 billion at the end of the quarter.
The company announced a quarterly dividend of NOK 1.70 per share.
Mowi ASA (MHGVY) expects a further decrease in production costs due to economies of scale and improved biological conditions.
Prices in the quarter were lower than expected due to record high industry supply.
The company faces potential indirect effects from tariff turmoil in the US, which could impact demand.
Mowi ASA (MHGVY) experienced higher costs in some regions, such as Chile, due to high-cost sites.
The Norwegian government's White Paper on agriculture suggests more taxes and fees, which could impact the industry.
There is uncertainty regarding the long-term impact of tariffs and potential economic slowdowns on demand.
Q: You had guided 2% to 3% industry supply growth in February, but now you expect 6%. What has changed? Is there a chance that 2026 supply growth could also be revised up? A: Kristian Ellingsen, CFO: The biological performance and recovery in Norway have been better than expected. The industry is operating at high capacity utilization, and given current regulations, there's limited growth potential beyond this. 2025 is a recovery year from previous modest growth, limiting future potential.
Q: Fish meal and fish oil prices have dropped over the last 12 months, but your revenue per kilo in the feed segment has been flat. Why hasn't it decreased with raw materials? A: Kristian Ellingsen, CFO: There was a positive development in 2024, but a pause in momentum in Q1 2025. We expect continued positive effects due to good fundamentals in the fishery season in Peru. Ivan Vindheim, CEO: The feed formula and energy costs also play a role, so it's not purely linear.
Q: How significant is the strong biology in the first half of 2025 for costs in the second half for Norway? A: Ivan Vindheim, CEO: Costs are dropping, especially in Norway, which is our largest segment. If this trend continues, it will be beneficial, but it's dependent on biology, which has been exceptionally favorable so far.
Q: When do you expect the quarter-on-quarter growth to ease off, and have retail prices started to come down? A: Kristian Ellingsen, CFO: We expect more moderate growth figures in upcoming quarters, but the high biomass will impact 2025. Retail prices haven't seen major declines yet, but we expect this over time. Ivan Vindheim, CEO: Quarter-over-quarter growth should ease by the fourth quarter, with next year looking different due to normalized biology.
Q: Global supply growth is up by 8%, but consumption is up by 5%. Will this impact price dynamics going forward? A: Kristian Ellingsen, CFO: This is normal, with consumption slightly higher than supply. The market has absorbed the supply, and there's no significant inventory buildup.
Q: Have you planned more retail promotions and campaigns for the second half of the year? A: Ivan Vindheim, CEO: Yes, preparations are ongoing. We expect average consumer prices to come down due to promotions and eventual shelf price reductions.
Q: Can you comment on the strong performance in Norway this quarter? Is it due to better vaccines, sea temperatures, or other factors? A: Ivan Vindheim, CEO: The environmental conditions and new winter sore vaccine have been favorable. This year has seen tailwinds from all directions, which is rare, but it has led to strong performance.
Q: How have US customers reacted to the tariffs, and what is the short-term demand impact? A: Ivan Vindheim, CEO: We haven't seen an effect yet as shelf prices haven't changed. If tariffs remain at 10%, it's manageable, but higher tariffs could have a more prolonged impact.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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