Marine Harvest Says Chile Situation Challenging Due to ISA

By Meera Bhatia

Feb. 4 (Bloomberg) -- Marine Harvest ASA, the world’s largest salmon farmer, said the situation in Chile “remains challenging” due to new outbreaks of Infectious Salmon Anemia, or ISA.

The company no longer expects to break even on an operational earnings before interest and tax level in Chile this year and cut its expected sales volume there by 10,000 tons to 30,000 tons, Oslo-based Marine Harvest said today in a statement. Marine Harvest Chile had an operational Ebit loss of 168 million kroner ($24.5 million) in the fourth quarter.

Salmon farmers in Chile, struggling to eradicate a fish- sickening virus, may be at the start of their worst year yet as the disease spreads and the credit crunch slashes funding, the nation’s fishing regulator has said. Chile, the world’s second- largest salmon producer, may cut output more than 30 percent this year because of ISA, German Serrano, an analyst at BanChile Inversiones in Santiago, has said.

“Marine Harvest will be cautions with smolt stocking and investments in the short term, and will have a strong focus on improved operational performance,” Chief Executive Officer Aase Aulie Michelet said in the statement. “Given that Marine Harvest’s financial exposure to Chile has reached a manageable level, and given continued improvements in operations, we expect an improved performance in 2009.”

Marine Harvest said its fourth-quarter loss widened as a result of the weakening of the kroner, lower interest rates reduced the market value of so-called interest hedge instruments and as the fair value adjustment on biomass was negative.

The fourth-quarter loss widened to 666.3 million kroner, from 147.6 million kroner a year earlier, while sales rose 10 percent to 4.04 billion kroner. The company reported an operating profit of 267.6 million kroner in the period, compared to a loss a year earlier.

The company expects to harvest 296,000 tons of salmonids this year, of which 67,000 will be collected during the first quarter, Marine Harvest said.

To contact the reporter on this story: Meera Bhatia in Oslo at mbhatia2@bloomberg.net.