Profit and loss accounts
As expected, low salmon prices during much of the first quarter led to a weak financial result for Pan Fish, with an operating loss of NOK 56.8 million compared with a profit of NOK 142.6 million last year. The operating loss includes a reversal of previous write-downs of stocks in the amount of NOK 25 million. The operating loss before ordinary depreciation and reversal of previous write-downs (EBITDA) was NOK 2.1 million in the first quarter, compared with a profit of NOK 200 million last year. The pre-tax loss was NOK 167.1 million in the first quarter, compared with a profit of NOK 296.3 million last year. Last year the spin off of Pan Pelagic was included under financial items in the income statement in the amount of NOK 231 million. Operating revenues were NOK 1.4 billion in the first quarter, compared with NOK 1.5 billion last year.
Balance sheet
The consolidated balance sheet total at 31 March 2002 was NOK 8.5 billion, compared with NOK 5.3 billion at the same time last year. The purchase of fish farming companies with a total of 12 salmon-farming licences and the repurchase of Pan Pelagic are mainly responsible for the balance sheet increase. The book equity ratio at 31 March 2002 was 15.9 %, compared with 16.5 % on the same date last year. Towards the end of January Pan Fish carried out a private placing and sale of own shares, which gave the company a net added capital of NOK 280 million. The issue price was put at the closing price on the day before the issue/ sale of own shares took place. Following this, Pan Fish holds only an insignificant number of own shares. At the end of the first quarter related parties owned 988,197 Pan shares. The company has more than 6,300 shareholders.
Fish farming
After reversing the previous write-down, fish farming had an operating loss of NOK 88.6 million in the first quarter, compared with NOK 72.8 million last year. Low salmon prices led to a decrease in operating margin of NOK 7.77 per kilo gutted packed fish compared with the same quarter last year. Pan Fish harvested 24,100 tonnes of round weight salmon in the first quarter this year, compared with 17,750 tonnes in the same period last year.
Processing
The operating profit was NOK 9.3 million in the first quarter, compared with NOK 26.1 million last year. Turnover in the first quarter was considerably lower than during the first quarter in 2001. This is due to a reduction in the volume of frozen salmon portions. Our share of this segment will increase in the second quarter.
Sales
In the first quarter there was a greatly improved operating margin for sales, which was 3.7 % compared with 0.8 % for the first quarter last year. This gave a first-quarter operating profit of NOK 22.7 million, compared with NOK 4 million last year. The difficult EU market, with some prices below the minimum-price, has provoked the sales area into finding other, more profitable markets.
Pan Pelagic
This business area had an operating profit of NOK 3.6 million, compared with NOK 47.1 million last year. The lower operating profit is due to a poorer profit performance in the Consumption business area. The Meal and Oil area showed a substantial improvement. Very high prices for raw materials made it difficult to maintain the margin in the Consumption area. Pan Pelagic's holdings in fishing companies are under 50 %, which means that these companies are treated as associates. Pan Pelagic's share of the profits was NOK 11.5 million, including proceeds from the sale of assets. At the end of the quarter, Pan Fish owned 98.9 % of the shares in Pan Pelagic ASA.
Outlook
Salmon prices have risen substantially in all the major markets. We expect that this will produce results in the form of better earnings in the group's fish farming activities already in the current quarter.
