Mowi ASA’s Earnings Call: Record Growth and Strategic Moves

Mowi ASA ((MHGVY)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Mowi ASA painted an optimistic picture characterized by remarkable achievements and strategic advancements. The company announced record-breaking figures in both harvest volumes and revenue, alongside the successful acquisition of Nova Sea, which promises to bolster future growth. Mowi also received high praise for its sustainability efforts, although challenges in certain regions and potential tariff issues were noted. Overall, the sentiment was largely positive with forward-looking optimism.

Record-Breaking Year for Mowi

Mowi ASA celebrated a significant milestone, surpassing 500,000 tonnes in harvest volumes for the first time in its 60-year history. This achievement marks a 5.7% growth year-over-year and contributed to a record high revenue of €5.62 billion. The impressive growth signifies Mowi’s expanding footprint in the aquaculture industry and sets a strong foundation for future advancements.

Acquisition of Nova Sea

In a strategic move, Mowi acquired the remaining shares of Nova Sea, one of the leading salmon farming companies, for NOK 8.2 billion (€694 million). This acquisition is not only expected to bring about significant synergies but also aims to increase Mowi’s harvest volumes to 600,000 tonnes by 2025, further solidifying its market position.

Sustainability Recognition

Mowi’s commitment to sustainability was once again recognized as it was ranked the world’s most sustainable animal protein producer by the Coller FAIRR Initiative for the sixth consecutive year. This accolade underscores the company’s dedication to sustainable practices and its leadership in environmental stewardship within the industry.

Strong Performance in Consumer Products and Feed

Mowi’s Consumer Products division achieved an operational profit of €53 million, marking a record achievement. Similarly, Mowi Feed reached record highs with an operational EBITDA of €21 million in Q4 and €62 million for the year, showcasing the strength and profitability of its diverse business segments.

Challenges in Mowi Ireland

Despite the overall positive performance, Mowi Ireland faced difficulties, recording a loss in the fourth quarter due to very low harvest volumes and issues with Rickettsia. This highlights the inherent challenges in aquaculture, emphasizing the need for strategic management and innovation.

Biological Issues in Region Mid, Norway

Region Mid in Norway encountered biological challenges, including string jellyfish and gill issues, which resulted in low and costly biomass. These challenges underscore the complexities of aquaculture operations and the continuous need for adaptive strategies.

Potential Tariff Concerns

While tariffs on Canadian salmon into the U.S. have been postponed, the situation remains volatile and poses a potential risk to Mowi’s operations. This uncertainty highlights the importance of staying vigilant and proactive in navigating international trade dynamics.

Forward-Looking Guidance

Mowi provided robust forward-looking guidance, anticipating a record-breaking harvest volume of 502,000 tonnes in 2024, marking a 5.7% growth year-over-year. The acquisition of Nova Sea is expected to further elevate harvest volumes to 600,000 tonnes next year, ahead of the 2029 target now revised to 650,000 tonnes. Additionally, the company forecasts significant cost synergies from the acquisition, estimating NOK 400 million in savings. Mowi’s financial health remains strong with a net interest-bearing debt of €1.87 billion and an equity ratio of 46%, alongside the announcement of a quarterly dividend of NOK 2 per share.

In conclusion, Mowi ASA’s earnings call highlighted a period of remarkable growth and strategic advancements, characterized by record-breaking figures and a successful acquisition. Despite facing some regional challenges, the company remains optimistic about its future prospects, driven by its strong sustainability practices and strategic initiatives. The outlook is promising as Mowi continues to navigate the complexities of the market with resilience and foresight.