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Cermaq ASA Ongoing sanitary problems in Chile resulting in lower harvest sizes and increased costs. Cermaq acts to reduce risk by early harvesting of disease affected sites and improve control of production going forward.
In the second quarter 2008 the average size of Atlantic salmon harvested was 2.89 kilograms round weight compared to 4.43 kilograms in the second quarter 2007 and 3.53 kilograms in the first quarter 2008. The very low average harvest size is a consequence of ISA and other diseases. In these sites harvesting took place despite the low fish sizes in order to minimise mortality rates and to improve the site conditions as soon as practically possible. Prices for atlantics were affected by low average sizes and were lower than in the first quarter 2008. The cost of atlantics sold in the second quarter was NOK 2.5 per kilogram higher than in the first quarter 2008. The disease problems experienced in the quarter result in a loss on Atlantic species sales, which comes despite the increase in U.S. market prices for larger sized fish.
In addition to the losses on fish sold, Cermaq has decided to accelerate the harvesting of three sites where there are outbreaks of disease. The 3 sites will be harvested in Q3 at smaller sizes, rather than later as originally projected and a net realisable value provision of NOK 38 million will be taken in the financial results for the second quarter to cover the projected losses of emptying out the sites early. Due to the lower average harvest sizes for Atlantic now projected, full year production volume guidance is reduced by 3k tonnes. The revised volume guidance for Chile is shown in the table below.
Due to the biological conditions for production in Chile expected sales volumes remain uncertain. Cermaq will regularly update the market on the developments in production conditions in Chile during 2008.
