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Best results ever for Cermaq: EBIT pre fair value of NOK 299.9 million in the fourth quarter 2005


(Oslo 10.02.2006) Cermaq made strong progress in the fourth quarter of 2005 with an EBIT pre fair value NOK 299.9 million, up NOK 180.5 million from the fourth quarter 2004. The Mainstream farming business delivered significantly improved earnings. EWOS increased both its market share and volumes from the same period in 2004. However, underlying EBIT pre fair value was lower.

Preliminary results for the full year of 2005 shows an increase in EBIT pre fair value of NOK 309.0 million to NOK 635.8 million, which is all time high for the group. Mainstream full year EBIT pre fair value increased by 355 percent to NOK 503.9 million due to higher prices, the impact of acquisitions and lower costs. EWOS division full year EBIT pre fair value fell by 27 percent due to lower margins in key markets, despite higher volumes.

The preliminary net result for the year of NOK 658.2 million (2004: NOK 235.6 million) is Cermaqs strongest ever.

CEO Geir Isaksen said “The results for the fourth quarter 2005 round off a successful year for the Cermaq Group. The strong performance in Mainstream has driven the result improvement. EWOS division saw significantly increased volumes during the quarter”

Mainstream group reported a fourth quarter 2005 EBIT pre fair value of NOK 256.4 million compared to NOK 57.1 million in the fourth quarter of 2004. Average prices per kilogram in NOK in the quarter were 25 percent higher than in the equivalent period in 2004.

Mainstream Chile had better prices in all markets which increased the result despite lower volumes of coho and trout. In particular prices on longer term contracts for frozen product were increased. A new freezing and processing plant was opened, which has significantly increased capacity to produce frozen portions and fillets, and brings down processing costs.

Mainstream Canada benefited from improved prices, and had higher volumes due to the impact of acquisitions in the third quarter 2005. Mainstream Scotland saw better cost performance on Atlantic salmon plus higher prices but their result was impacted by a charge of NOK 5.0 million in the fourth quarter for trout inventory affected by production problems. Mainstream Norway performed well in the quarter with good biological performance and low costs.

EWOS group achieved an EBIT pre fair value of NOK 66.0 million in the fourth quarter 2005, compared to NOK 66.5 million in the same period last year. Volumes were up in the quarter by 21 percent compared to the equivalent period in 2004, reflecting increased market share and strong demand for feed, particularly in the Norwegian market. Margins remained under pressure in the quarter due to competition and an increase in fish meal costs. However the result benefited from the release of the remaining part of the provision for the cadmium incident earlier in 2005, amounting to NOK 16.9 million.

Cermaq’s net interest bearing debt decreased by NOK 491.0 million from NOK 1,913.1 million at the end of the third quarter to NOK 1,422.1 million at the end of 2005 (end of 2004: NOK 1,038.5 million). The decrease in the fourth quarter is partly due to the impact of the share issue in October 2005 which generated net proceeds of NOK 213.2 million.

The equity ratio at the end of the year was up from 49.9 percent at the end of 2004 to 53.1 percent at the end of 2005.

The directors propose a dividend for the year of NOK 1.85 per share compared to NOK 1.20 per share for 2004, a rise of 54 percent. This represents approximately 32% of adjusted after tax profit.

Cermaq’s key earnings measure under IFRS is EBIT pre fair value (Operating result before unrealised fair value adjustments). This is consistent in all material respects with Cermaq’s previous earnings measure, EBITA (Operating result before amortisation of goodwill). Unrealised fair value adjustments are made in Cermaq’s accounts to arrive at EBIT (Operating result). The adjustments for fair value relate mainly to valuing mature or harvestable fish, at a market value equivalent rather than cost. Cermaq reports EBIT pre fair value to clearly identify earnings on sales during the period.

The report can be downloaded from the following link:

The presentation can be downloaded from the following link:

The press release (including tables) can be downloaded from the following link:

About Cermaq
Cermaq is an international group of companies with activities in fish farming, production of salmonid feed and research in aquaculture. Cermaq has operations in Norway, Scotland, Canada and Chile, the main geographic regions for salmon and trout farming.
Through its EWOS subsidiary, Cermaq ranks as the world’s second largest fish feed producer. The Mainstream subsidiary is the second biggest farmer of salmon and trout in the world. The group had sales of over NOK 5 billion in 2005, and employs some 3 700 people. Cermaq is listed on the Oslo stock exchange with ticker code CEQ.


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