The world leader in processing pelagic fish catches for human consumption also started noticing the effects of a wider decline in fish meat prices worldwide. Norway Pelagic (OSE: NPEL) managed to just deliver positive accounts for Q1 2012, which was significantly worse than last year. Margins on mackerel but also herring were down as fish prices have corrected. Strong Norwegian krone also weighed on the result.
The company also said there will be no dividend this year. Austevoll Fisk AS consolidation led to some more debt being carried, somewhat eroding the still strong financial position and increasing interest expenses. More capital is also needed to keep products in stock for the low season, which the company hopes will show in Q2 earnings. Furthermore, the company foresees the need for more consolidation in the industry.
Due to unilateral action by Iceland and Faroe Islands, who are struggling with their economies, to increase their mackerel catches immensely in the ongoing mackerel war, Marine Stewardship Council has now suspended SPPO North East Atlantic mackerel fishery MSC certification. Fish caught after 30th of March 2012 cannot be sold with such a certificate. If no corrective actions are taken before June 29 2012, the certificate will be withdrawn completely.
Icelandic and Faroe mackerel has supplied more price sensitive geographies. For herring there is more left to be caught vs. last year due to the increase of North Sea Herring quota. The herring catches so far have been NVG herring from the north. Margins on North Sea Herring tend to be higher as it is better suited for filleting and matjes. Capelin quota has been nearly fully caught on Q2 and its margins have been solid. Blue whiting fisheries also seem to be delivering.
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