Fish farm giant’s Scottish operations hit by egg and disease woes

A ban on Norwegian egg imports and ongoing health woes hit Mowi Scotland’s salmon farming profits and output in the second quarter.

Figures announced by the Scottish division’s Norway-based parent, show volumes on this side of the North Sea fell by nearly 50% year-on-year.

Mowi Scotland produced 12,954 tonnes of fish in the three months to June 30 2022, down from 19,162t a year ago.

Earnings slump

Operational earnings before interest and taxes (Ebit) slumped to £17.5 million in the latest period, from £25.2m previously, as “poor production on stocks grown from externally sourced eggs negatively impacted volumes and costs”.

A temporary ban on imports of salmon eggs and trout ova from Norway was introduced several years ago amid fears a deadly fish virus – infectious salmon anaemia – may spread to Scotland.

The salmon industry in Scotland was forced to look elsewhere for eggs, which Mowi said had led to poor production performance.

Announcing its latest results, Mowi, the world’s largest fish farmer, said: “Low production on stocks based on externally sourced eggs, in addition to lower biomass going into the quarter compared with last year, had a negative impact on volumes.

Increased feed costs also hurt profitability in the Scottish business, which suffered a £2.5m hit from “mortality losses” – dead fish.

Mowi said the fish deaths were mainly related to gill issues, “treatment mortality” and predators.

We expect improvements to materialise with increased harvest weights and better cost performance in the fourth quarter.”

The company added: “In addition to the issues related to stocks grown from externally sourced eggs, the biological situation has been negatively impacted by gill issues, including AGD (amoebic gill disease), algae and jelly fish.

“These issues have continued into the third quarter. CMS (cardiomyopathy syndrome, a fatal viral disease which causes inflammation of the heart) also remains at a relatively high rate of detection.

“Although somewhat later than originally planned, the stocks based on external eggs were harvested out in the third quarter.

“We expect improvements to materialise with increased harvest weights and better cost performance in the fourth quarter.”

Wider group posts record figures

Mowi Scotland employs about 1,500 people across operations including 48 fish farms producing more than 68,000t of salmon annually.

Group-wide results for Mowi – which has operations in Ireland, Canada and Chile, as well as Norway and Scotland – revealed record operational Ebit of £270.3m for Q2 2022, more than double the £115.8m reported for the first three months of 2021.

The company also reported record revenue – up 23% year-on-year at just over £1 billion, driven by “good operations and high salmon prices”.

Mowi chief executive Ivan Vindheim said:  “The foodservice segment continues its post-pandemic recovery which is positive for overall salmon demand.”