Mowi ASA Flags Strong Q1 Amid Salmon Price Squeeze

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

Mowi ASA used its latest earnings call to paint a broadly upbeat picture, despite clear near-term headwinds in salmon prices and regional hiccups. Management highlighted record seasonal revenue, strong harvest volumes and meaningful cost cuts, arguing these outweigh pressure from exceptional industry supply growth, localized biological issues and weaker results in some markets.

Strong top-line and operational profit

Mowi reported seasonally high revenue of EUR 1.54 billion and operational profit of EUR 221 million, marking its second-best first quarter on record. Operational EBIT rose about 3% year over year, helped by higher volumes and lower unit costs, underlining resilience in a quarter marked by softer prices.

Record harvest volumes

Harvest volumes reached a seasonal record of 136,000 tonnes in the quarter, up 26% from a year earlier and slightly above internal guidance. Management reiterated its 2026 volume guidance of 605,000 tonnes and its 2029 target of at least 650,000 tonnes, signaling confidence in continued growth despite market volatility.

Improved farming cost

Blended farming cost dropped to EUR 5.46 per kilo from EUR 5.89, a 7.3% reduction equivalent to roughly EUR 46 million in savings. The company expects costs to stay broadly stable in the second quarter before trending lower in the second half of 2026, reinforcing its cost-leadership narrative.

Balance sheet and capital metrics

Net interest-bearing debt stood at EUR 2.74 billion, essentially in line with the long-term target around EUR 2.7 billion, while the equity ratio came in at a solid 46%. Underlying earnings per share were EUR 0.27 and annualized return on capital employed reached 13.1%, with a five-year average near 17.4% that outpaces peers.

Mowi Norway performance and regional strength

Norway remained the core earnings engine, posting an operating profit of EUR 181 million on a margin of EUR 2.40 per kilo and a harvest of 76,000 tonnes. The North region stood out with an impressive margin of EUR 2.89 per kilo, underscoring its status as a key driver within the group portfolio.

Downstream and feed progress

Consumer Products volumes climbed 21% year on year to 70,000 tonnes, delivering an operational profit of EUR 20 million as underlying performance improved despite some legacy contracts. The feed segment remained stable with an operational EBITDA of EUR 6 million on 109,000 tonnes sold and a 2026 production target of 650,000 tonnes, supported by a cost-saving partnership.

Strategic bolt-on and shareholder return

Mowi expanded its Norwegian footprint by acquiring Torghatten Aqua’s 4,500-tonne sea-based site in Northern Norway on what management described as attractive terms. The board also declared a quarterly dividend of NOK 2.30 per share, emphasizing both financial discipline and confidence in future cash generation.

Cost leadership and productivity gains

The company stressed that ongoing productivity programs are delivering results, with about 20% of the first-quarter cost reduction coming from non-feed items. Management argued this supports Mowi’s position as a cost leader, pointing to top EBIT performance per region and strong standard license metrics in Norway.

Positive market outlook medium-term

Executives pointed to external research suggesting industry supply growth should normalize to around zero for the rest of 2026 and roughly 1% in 2027. Longer term, expectations of 1–2% annual supply growth underpin management’s view that market balance and pricing power will improve beyond the current oversupply phase.

Severe price pressure from high industry supply

Industry supply growth, adjusted for inventory, surged to 14% in the quarter, flooding the market and weighing heavily on salmon prices through winter and spring. Additional pressure from trade measures and geopolitical tensions further squeezed margins across several regions despite Mowi’s higher volumes.

Algae impact in Southern Norway

A pseudochattonella algae bloom in Southern Norway shaved roughly EUR 10 million off group results in the quarter, adding around EUR 0.07 per kilo to blended costs. The incident had an even larger per-kilo impact on Norwegian volumes alone, underscoring the biological risk inherent in sea-based farming.

Weak regional price performance

Mowi Chile faced an unprecedented local supply surge of about 25%, limiting operating profit to EUR 7 million and producing a slim margin of EUR 0.34 per kilo. Canada posted a small loss on 8,000 tonnes due to higher costs and soft prices, while Ireland merely broke even on 2,000 tonnes amid weak local pricing.

Iceland price and mix challenges

Arctic Fish in Iceland returned to a modest profit of EUR 2 million thanks to lower costs, but price realization lagged other origins. Management cited an unfavorable harvest mix with a low share of superior fish, highlighting the importance of product quality for capturing premium prices.

Downstream earnings decline

Headline earnings in the Consumer Products division fell from EUR 33 million a year ago to EUR 20 million in the latest quarter. Management emphasized that adjusted for weaker legacy contracts, underlying profitability actually improved, suggesting a healthier base heading into the remainder of the year.

Cash flow impacted by working capital and one-offs

Cash flow per share was pressured by working capital build-up alongside tax and capital expenditure payments, masking strong underlying earnings. Additional outflows stemmed from the final payment for Nova Sea shares, which management framed as a short-term drag for a long-term EBITDA contributor.

Cost and inflation uncertainty

Rising transport costs, driven by higher jet fuel and diesel prices, and a rebound in marine ingredient prices, particularly fish oil, are adding uncertainty to the cost outlook. While feed prices are largely covered and expected to remain stable through the third quarter, management acknowledged upside risk depending on future fisheries.

Forward-looking guidance and outlook

Mowi reaffirmed its 2026 farming volume guidance of 605,000 tonnes and an organic target of at least 650,000 tonnes by 2029, with Norway expected to reach 380,000 tonnes and aiming for 400,000 in the short term. The group also maintained its cost and cash flow guidance, projected feed output of 650,000 tonnes and reiterated that normalized industry supply growth should support a recovery in pricing and margins.

Mowi’s earnings call portrayed a company executing well on volume growth and cost control, even as temporary price and biological shocks bite into regional profits. For investors, the key message was that the current period of oversupply and volatility is manageable, with strong balance sheet metrics, disciplined capital allocation and clear volume ambitions underpinning a constructive medium-term story.