The results for the 2nd quarter (Q2) for Pan Fish (OSE: PAN) is significantly affected by the company`s ongoing restructuring phase. Despite this, the company has turned the negative operational trend and achieved an operating profit before depreciation (EBITDA) of NOK 55.5 million in the second quarter, compared with a loss of NOK 64 million for the corresponding period last year. Total write-downs and provisions for Q2 are NOK 1,480.8 million, principally related to licences, goodwill, stock and Pan Pelagic. The company consequently had a negative equity of NOK 471.4 million as of 30 June 2003.
- Pan Fish continue operations. Based on the discussions between the company and its banks, the Board of Directors finds that the company has access to sufficient cash reserves in order to achieve continued operations and the planned restructuring of the company.- Refinancing established in the autumn. The Board of Directors is in negotiations with the banks for refinancing of Pan Fish. It is most likely that debt will be converted to a satisfactory equity level, but the conversion price or level still remains to be settled.
'Pan Fish is currently facing a critical situation, but we are convinced that the company will emerge much stronger from this phase also. We can see that the measures implemented are producing positive results for operations, and this makes me optimistic on behalf of the company. However, continued operations, require a satisfactory refinancing for Pan Fish. We are in close dialogue with our owners and banks who are taking a conscientious and constructive approach to this difficult process and are confident that refinancing will be established during the autumn,' explains CEO Atle Eide.
Operations and outlook
Aquaculture: The operating loss before special items for aquaculture activities totalled NOK 20.4 million in the second quarter compared with NOK 90.6 million for the same period last year. During the second quarter, 26,031 tonnes round weight of salmon were harvested compared with 24,473 tonnes last year. Over this period, a number of initiatives have been introduced which will reduce the company`s expenses over time.
The persistently low salmon prices have resulted in full production costs for Pan Fish exceeding market price for salmon in Q2. Based on this fact and after an evaluation of the company`s stock within the individual areas of activity, total write-downs of NOK 166 million have been implemented for the quarter.
Processing: The operating profit before special items for processing activities totalled NOK 1.8 million compared with a loss of NOK 16.9 million last year. Processing had a positive growth during the 2nd quarter, with regards both volume and profit. Certain product groups are still subject to pressure on prices, but this is compensated by improved operations and lower raw material costs. Norway and France have shown a positive growth during the first six months of 2003, and in the 2nd quarter, Denmark has managed to turn around the negative trend from the 1st quarter.
Prospects: `In the short-term, we need to reduce production to re-establish market balance. Pan Fish is playing an active role in this move,` says CEO Atle Eide.Pan Fish will also focus on achieving a further reduction of operating expenses in order to strengthen the company`s relative competitive standing, and will also work towards establishing satisfactory refinancing.
'Once refinancing has been established, we are positive towards the long-term development. We are therefore maintaining our target to become one of the companies producing at the lowest cost in all our regions,' informs Atle Eide.
For further information, please contact: CEO Atle Eide, +47 911 52 977
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