SEAFOOD.COM NEWS [The Star] October 25, 2011

Marine Harvest ASA, the world’s largest salmon farmer, is set to report its worst quarterly earnings in almost 2 and
half years, hurt by lower prices amid record fish production.
The Oslo-based company, whose biggest shareholder is shipping tycoon John Fredriksen, is expected to report third-quarter net income of 308.3 million kroner (US$55.4mil) on Oct 27, according to the mean estimate of 10 analysts
surveyed by Bloomberg.

That would be its lowest earnings since a 66.1 million-kroner second-quarter loss in 2009.
Salmon supplies from the biggest producers, Norway and smaller rival Chile, are exceeding demand, pushing spot
prices for the fish down about 43% since April to the lowest monthly average in four years, curbing salmon farmers’

“It will be a tough third quarter for everyone,” said Espen Furnes, an Oslo-based fund manager at Storebrand Asset
Management, which oversees US$74bil. “We are pretty cautious on the salmon industry at the moment.”
Prices are likely to stay low the rest of 2011 and 2012 as global supply growth is expected to rise 250,000 tonnes in
the next 18 months, according to Nordea Markets, which sees prices at 31 kroner per kg this year and 24 kroner for
next year. The total supply was 1.44 million tonnes last year.

Record salmon harvests from Norway and Chile, rebounding from an infectious anemia virus that ravaged its fish
farms, have hurt earnings industry-wide, analysts say. Spot prices, at almost 43 kroner in April, fell to a monthly
average of 24.22 kroner last month, said Fish Pool, an exchange for fish and seafood derivative contracts.
“It’s pretty difficult at the moment as Chilean supply is coming on stream – combined with an environment where
the demand side is also weakening,” Furnes said. “That’s really having a big impact on pricing.”
Nordea Markets analyst Kolbjoern Giskeoedegaard says SalMar ASA, Grieg Seafood ASA and Norway Royal Salmon

ASA will be worst impacted by the price collapse while Marine Harvest, Cermaq ASA, Leroey Seafood Group ASA and Bakkafrost P/F will fare better due to fixed contract prices and diversifying into fish meal and feed.
Grieg Seafood is expected to report a net loss of 6.98 million kroner. SalMar, the fourth-largest salmon producer,
may report a 16% drop in earnings. Cermaq, the third-biggest producer of the fish, will report net income of about
239 million kroner, down from 469.7 million kroner a year earlier.

Leroey, the second-largest producer, may report a 34% decline while Bakkafrost, a fillet specialist, is set to report
about a 25% increase, helped by being a low-cost salmon farmer.