Higher Fish mortality and price deflation led to a big fall in sales and profits for the Scottish arm of Norwegian salmon giant Mowi, latest accounts have shown.
The supplier’s strategic report for the year ending 31 December 2020, listed on Companies House, revealed the business endured a 72.4% fall in operating profits last year, from £95.6m in 2019 down to £26.4m. Turnover also fell by 11%, from £401.5m to £357.3m.
Having seen low supply and salmon price inflation in recent years, Mowi Scotland said a 5.6% decrease in achieved sales price, coupled with an increase in harvest volumes of 71.1% due to the build-up of biomass in 2019, contributed to its downgraded performance.
It continued to face challenges from fish health issues such as sea lice, cardio myopathy and gill disease, resulting in higher mortality, lower biomass growth and downgraded product, it said. These factors also impacted profitability due to a higher cost of production per kilo.
Performance was additionally dampened by the restrictions around eating out caused by the coronavirus pandemic, said James Cowan, Mowi’s head of sales for UK consumer products.
However, he stressed Mowi had seen “a strong recovery in operating EBIT across all parts of the group [in 2021]” from its fish Farming to consumer products operations.
This was reflected in the successful launch of the Mowi consumer brand into Sainsbury’s in March, he added, which is now available in Tesco and Amazon Fresh too, and “driving incremetal sales for our customers”.
Cowan’s comments were further reinforced by Mowi’s Q3 group results this week, which showed operating profit up to €131m, compared to €80m last year.
Revenues for the quarter hit a record high of €1.03 billion, against €958.2m for Q3 last year, while year to date sales of €3.06 billion were 9.3% higher than last year’s figure of €2.8 billion.
Mowi Scotland operates in more than 50 locations around Scotland, including hatcheries, freshwater and seawater farms, plus primary processing units and a feed production factory.