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Marine Harvest ASA (OSL:MHG) Turnaround process in Chile In the Q2 2008 presentation, Marine Harvest announced that a new business plan for business unit Chile would be finalised during Q3 2008. Further, Marine Harvest announced that an impairment test of the balance sheet values would be executed based on the assumptions in the new business plan.
The business plan and impairment has now been approved by the Board of Directors. Marine Harvest Chile targets EBIT break even in 2009 and positive results thereafter.
Marine Harvest Chile expects to release in the range of 15 million smolt per annum in 2008 and 2009. In subsequent years, Marine Harvest Chile expects to increase the smolt release by 10% per annum. Harvest volumes in both 2009 and 2010 are expected to be in the range of 40 thousand tonnes.
The business plan includes uncertainty due to the instability of the biology in Chile. The impairment, write downs and charges will affect the Q3 accounts as follows: * Write down of goodwill in Chile to zero (MNOK 1300), * Write down of licences, assets and biomass and charges linked to the restructuring programme (MNOK 350)
The abovementioned impairment and charges will be taken in the Q3 accounts. Based on the balance sheet as of Q2, the equity ratio would be reduced from approximately 54% to 51%. The required equity ratio under Marine Harvest's syndicate facility is 40%.
The abovementioned charges allow for Marine Harvest Chiles's alignment of the operations and cost base in Chile to the reduced harvest volumes in the next years. The restructuring does not negatively affect Marine Harvest's scaling flexibility.
Marine Harvest remains confident that Chile will be one of the most interesting regions for salmon farming in the future. The pace of regaining sustainable biological conditions in the region will depend on the measures taken by the Chilean authorities and industry going forward. Marine Harvest will continue to participate actively in this process.
Q3 2008 Harvest Volumes As previously communicated Marine Harvest has a policy of reporting actual harvest volumes shortly after the end of each quarter. The harvest volumes are provided in head on gutted (HOG) equivalents.
Notes: (1) Sold volume for Chile (2) Figures include salmonid species only
In connection with the presentation of the Q2 2008 results, Marine Harvest guided a total harvest volume of 69 thousand tonnes (HOG) for Q3 2008.
Marine Harvest Norway Marine Harvest Norway expects to post an operational EBIT per kg of approximately NOK 3 for Q3. The results are negatively impacted by harvesting of fish from sites affected by Pancreas Disease (PD) in the southern and western parts of Norway. Due to all measures taken, Marine Harvest Norway has seen a positive development with regards to PD on the fish put to sea during 2008.
For further information please contact: Jørgen Andersen (CFO) +47 951 43 854 Henrik Heiberg (Finance Director) +47 917 47 724
