Pan Fish ASA: Financial results in the first quarter 2005

Pan Fish achieved an operating result before depreciation (EBITDA) of NOK 51.9 million in the first quarter, an impressive result considering the substantial reduction in harvesting compared to the same period in 2004. The company's gross operating revenues amounted to NOK 452.0 million in first quarter 2005, down approximately 150 million compared to the same period last year. The fall in revenues is a consequence of the comprehensive restructuring and temporary downsizing the company has carried out.

 

 

Capital increase

Pan Fish has reached an agreement with the company's main shareholders and bank relations concerning a final refinancing package for the company. Based on the balance per 1Q, the agreement will provide an equity share of 35 percent. This will enable Pan Fish to endure periods of difficult market conditions without having to resort to agreements that have a negative effect on the company's long term position. The agreement implies the following:

 

Increase of capital through a public share issue of NOK 200 million at a price of NOK 1, corresponding to a discount of 25 percent.

Increase of capital through a process whereby Nordea an DnB NOR convert NOK 500 million of the Pan Fish's debt into equity (presupposes that Pan Fish succeeds at conducting the NOK 200 million public share issue)

 

"The total refinancing package of NOK 700 million establishes the necessary financial framework to enable Pan Fish to operate as an independent fish farming company with the required ability and muscle to lift production to the targeted level. The refinancing and share issue will provide Pan Fish with a solid financial platform and the required work space to be able to focus on the company's most important task: high quality, profitable salmon farming. Together with the structural initiatives we have carried out during the past two years, this places Pan Fish in a very good position to realise the goal of becoming the most cost-effective supplier of quality salmon to customers", says Atle Eide, CEO of Pan Fish.

 

 

Fish farming: The company's fish farming business generated operating revenues of NOK 352,6 million (adjusted for unrealized income biomass - IFRS) in first quarter 2005, compared with NOK 531.2 million in the same period of 2004. The fish farming operations had an operating income (adjusted for unrealized income biomass - IFRS) of NOK 20.2 million, compared to NOK 24.4 million from the same period in 2004. 13,891 tonnes of round weight of fish were slaughtered in the first quarter of 2005, compared with 18,294 tonnes round weigth in first quarter of 2004. Production costs on both harvested fish and fish in sea is on the right track in relation to achieving the goal of becoming the lowest cost producer.

 

VAP: Pan Fish's value added products (VAP) business, which comprises Pan Fish France and Pan Fish Denmark (formerly Vestlax Hirtshals), generated gross operating revenues totalling NOK 109.3 million in the first quarter 2005, compared with NOK 144.5 million in the first quarter of last year. The total operating loss (EBIT) was NOK 10.4 million, compared with a loss of NOK 5.5 million in the corresponding period last year. The results for the VAP business are not satisfactory, and Pan Fish is currently in the process of initiating measures to counteract this negative development.

 

Outlook: "Our goal of achieving the most cost-effective production of quality salmon in the industry is well established in our organisation, and we have placed the entire biological production cycle on the agenda, with concrete goals and initiatives designed to ensure excellent performance throughout the value chain. With the solid financial platform we are now establishing, the goal is to lift production to a level which makes the most of our current infrastructure capacity, in a way that is compatible with biological and market sustainability. We have now established a strong foundation in order to achieve this goal", says Atle Eide, CEO of Pan Fish.

 

"The situation with completely unreasonable and unacceptable trade restrictions in the EU, one of our core markets, is damaging both for our customers and the industry. If a permanent anti-dumping duty is introduced, this will be harmful for workers within the EU as well. It is alarming that a minority in the Scottish fish farming industry, comprising a total work stock of 265 employees, are able to find support for such comprehensive actions against an entire industry with thousands of employees. I have hope and faith that the EU and Norwegian authorities will shortly agree on a solution, before even more jobs are affected and before the punitive duty inflicts lasting damage on the industry, including on EU fish farmers", says Atle Eide.

 

For further information: Atle Eide, CEO of Pan Fish, +47 911 52 977

 

 

 

Atle Eide

CEO, Pan Fish ASA