Mowi ASA Earnings Call: Resilience Amid Challenges

Mowi ASA ((MHGVY)) has held its Q1 earnings call. Read on for the main highlights of the call.

Mowi ASA’s recent earnings call painted a picture of resilience amid a mix of operational successes and market challenges. The company reported strong operational and biological performance, with significant growth in harvest volumes and improved cost efficiency. However, it also faced hurdles such as lower than expected prices, tariff issues in the US, and regulatory concerns in Norway. Despite these challenges, Mowi’s diverse operations and strategic initiatives suggest a robust outlook.

Strong Operational and Biological Performance

Mowi achieved record-high growth in the sea, with improved biological metrics leading to an operational profit of €214 million and revenue of €1.36 billion on 108,000 tonnes of harvest volumes, marking a 12% increase year-over-year. This performance underscores the company’s effective management and operational strategies.

Increased Harvest Volumes and Industry Supply Growth

The industry supply growth was notable, with a 13% increase year-over-year in Europe and 8% globally. Mowi maintained its farming volume guidance of 530,000 tonnes for the year, reflecting confidence in its production capabilities and market demand.

Cost Reduction and Efficiency Gains

Mowi reported a decrease in realized blended farming costs compared to the previous year, with further reductions anticipated due to economies of scale and improved feed prices. This focus on cost efficiency is expected to bolster the company’s financial performance.

Positive Performance in Consumer Products and Feed Divisions

Mowi’s Consumer Products division posted an operating profit increase to €33 million, while the Feed division achieved seasonally record-high volumes with a 14% increase year-over-year. These results highlight the strength and diversification of Mowi’s business operations.

Dividend Distribution

The Board of Directors announced a quarterly dividend of NOK 1.70 per share, reflecting the company’s commitment to returning value to shareholders despite market challenges.

Lower Than Expected Prices

The quarter saw lower than expected prices, attributed to record-high industry supply and tariff turmoil in the US market. This pricing pressure is a key challenge for Mowi moving forward.

Challenges in Certain Regions

Mowi Arctic Fish broke even, contrasting with a profit in the previous year, due to lower prices and higher costs. This regional challenge highlights the variability in market conditions across different geographies.

Tariff Concerns in the US Market

The imposition of tariffs on salmon in the US market is a concern for Mowi, although the direct effects are expected to be limited. The company is closely monitoring the situation to mitigate potential impacts.

Norwegian Government’s White Paper on Aquaculture

The Norwegian government’s white paper was seen as discouraging, focusing on more taxes and fees, with a perceived bias against the industry. This regulatory environment poses a challenge for Mowi’s operations in Norway.

Forward-Looking Guidance

Mowi provided significant guidance for the upcoming periods, maintaining its farming volume guidance for 2025 at 530,000 tonnes and expecting to harvest 600,000 tonnes in 2026, with Nova Sea contributing to this growth. Looking further ahead, the company aims for at least 650,000 tonnes by 2029. Despite facing lower-than-expected prices, Mowi remains optimistic about future cost reductions and demand resilience, supported by its integrated global value chain.

In conclusion, Mowi ASA’s earnings call reflected a strong operational performance and strategic resilience amid market challenges. The company’s focus on cost efficiency, volume growth, and strategic initiatives positions it well for future success, despite facing pricing pressures and regulatory hurdles. Investors can take confidence in Mowi’s robust operational metrics and forward-looking guidance, which suggest a positive trajectory for the company.