understanding the wildfish harvesting business...
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• The Global Picture – Supply side – Markets – From science to individual vessel quotas
• Norwegian fisheries and HAVFISK
• Outlook
Agenda HAVFISK ASA
The most important white fish species from the fisheries
3.543
1.050
1.216
345
280494
260
White fish catch -‐ 2015 E
Alaska Pollock
Hakes
Atlantic Cod
Haddock
Saithe
Pacific Cod
HokiSource: Kontali AnalyseSource: Kontali Analyse
(1000 tonnes)
Catch by nations and species (mt)
Alaska Pollock
Atlantic cod Hake Saithe Haddock SBW
Pacific cod Hoki TOTAL
Chile - - 40 000 - - 14 000 - 40 000 94 000 88 000
Argentine - - 270 000 - - 9 000 - 45 000 324 000 328 000
USA 1 405 000 - 250 000 8 000 3 000 - 330 000 - 1 996 000 1 984 000
Canada 10 000 18 000 50 000 5 000 8 000 - 5 000 - 96 000 88 000
Russia 1 670 000 448 000 2 000 1 000 77 000 - 80 000 - 2 278 000 2 212 000
Norway - 475 000 2 000 156 000 94 000 - - - 727 000 659 000
Iceland - 239 000 - 53 000 36 000 - - - 328 000 329 000
Faroe Islands - 17 000 - 17 000 3 000 - - - 37 000 51 000
EU - 160 000 68 000 54 000 50 000 - - - 332 000 318 000
Namibia - - 140 000 - - - - - 140 000 140 000
South Africa - - 150 000 - - - - - 150 000 145 000
Japan/S-Korea 280 000 - - - - 3 000 65 000 - 348 000 343 000
New Zealand - - - - - 35 000 - 150 000 185 000 195 000
Others - 10 000 96 000 14 000 1 000 2 000 2 000 4 000 129 000 118 000
Total 3 365 000 1 367 000 1 068 000 308 000 272 000 63 000 482 000 239 000 7 164 000 6 998 000
Source; National statistics/KA-Est.
NationCatch by nation and species 2014
E 2015
02.000.0004.000.0006.000.0008.000.000
10.000.00012.000.00014.000.00016.000.00018.000.000
AlaskaPollock
Atlanticcod
Hake Haddock Saithe Pacificcod
Hoki SBW
1000 NOKMain whitefish fisheries by first hand value -‐ 2014 E
Source: Kontali Analyse
The world market of whitefish
47 %
14 %12 %
9 %8 % 7 %
2 %
5 %
0 %
5 %
10 %
15 %
20 %
25 %
30 %
35 %
40 %
45 %
50 %
EU North America Asia Russia South America Japan Africa Others
Source: Kontali Analyse
The global volume of groundfish -‐ Where is it consumed? (2014 E)
White Fish Cod Alaska Pollock Haddock Saithe Hakes HokiTotal
Germany 547 70 411 3 23 36 4UK 474 250 101 86 15 20 2Spain 473 190 32 0 6 245 0France 359 60 183 13 26 55 22Scandinavia (SE, DK, FI) 245 134 26 23 40 10 12Poland 243 97 109 7 6 13 11Be/Ne/Lux 237 89 71 17 32 26 2Portugal 162 98 5 0 0 59 0Italy 158 44 30 0 0 84 0Others 115 45 57 3 5 3 2
3013 1077 1025 152 153 551 55
Top 3 Markets1 Germany UK Germany UK Scandinavia Spain France2 UK Spain France Scandinavia Be/Ne/Lux Italy Scandinavia3 Spain Scandinavia Poland Be/Ne/Lux France Portugal Poland
Source: Kontali Analyse
1000 tonnes R.W.
EU country split -‐ whitefish consumption 2014
• Annual quota advice from the relevant scientific institution – Interna<onal Council for the Explora<on of the Sea – Species by species scien<fic advice
• Problem: Fish don’t care about borders in the sea… • Solution: Agreement on total allowable catches (TAC)
and quota sharing between nations through annual bi- or multilateral negotiations – Based on scien<fic advice – End result: na<onal TACs for various species
How is the vessels quota decided?
• Bi-lateral fisheries agreements involving Norway: – Russia / Norway – EU / Norway – Greenland / Norway – Faroe Islands / Norway – Iceland / Norway
• Multi-lateral fisheries agreements where Norway is part (and participate in fisheries): – NEAFC – NAFO – CCAMLR
How is the vessels quota decided?
National TAC from agreements - Allocations for science, political purposes etc = TAC available to commercial fishing fleet Divided between variety of vessel groups according to long term quotasharing agreement within the Norwegian Fishermens Association
-‐ Different agreed shares from species to species
How is the vessels quota decided?
How is the vessels quota decided?
• Trawler groups quota share (eg. Cod 33%) allocated with an equal quota size per individual vessel quota
• Total of ~88 individual vessel quotas in trawl group (Cod)
• One vessel can hold up to 4 quotas
• World fishing nation no. 10 by volume (largest in Europe)
• World fishing nation no. 2 by export value
• The worlds largest Cod stock
• EU 31 mt pr fisherman • Norway 255 mt pr
fisherman
Positioned for profitability
Modern, efficient, well managed, sustainable Norway as a fishing nation
20
40
60
80
100
120
140
1980 1985 1990 1995 2000 2005 2010 2014
Vessels
Number of cod trawl vessels Norway 1980-‐2014
Source: Fiskeridirektoratet
• Norway’s largest harvesting company and quota holder – 11% of the Norwegian whitefish quota (cod, saithe, haddock)
– 7 Barents Sea shrimp licenses + 1 Greenland
• 10 operational trawlers – Three new vessels delivered in 2013 and 2014
Key facts Company overview
Norwegian fishing companies The 35 largest fishing companies in 2014 (gross catch value in mill. NOK)
MNOK
• 390 employees • Ownership to fish
industry facilities in northern Norway
• Facilities are operated by sister company Norway Seafoods
• Listed on Oslo Stock Exchange
• Aker ASA 73,25 %
Key facts Company overview
Year 2014 • Operating Revenues:
1 049 MNOK • EBITDA: 299 MNOK
(28 %) • EBITDA per kilo: 5,0 NOK • Equity ratio: 35 % • Volume 2014: 59 295 mt (~83 000 mt live weight)
Q2- 2015 Operating Revenues: 257 MNOK EBITDA: 84 MNOK (34 %) EBITDA per kilo: 6,1 NOK Equity ratio: 36,2 % Q3 figures – 6 November
Results 2014 & Q2 2015 Financials
• Strong supply growth and financial downturn in key markets have negative impact on cod prices.
• Cod-prices appears to have bottomed out in Q1/2013
Export prices for frozen cod h/g in NOK. Source: Norwegian Seafood Council
Historic price trend - Cod Value drivers
Cost breakdown (based on 2014 figures) Value drivers
28
100
150
200
250
50
Dri
vers
Cost per day in operation Fixed cost : yearly maintenance in ship yards
Cost
615732
159101
316
Personnel
10% 31%
Freight/ packaging
Maintenance
6% 3%
Fuel
6%
Fishing gear
16%
Administration
Cost (MNOK) % of revenue
Percentage of catch value Cost per kilo
Cost per day in operation Average consumption for a freezing trawlers = 10 000 litres/day
Cost per day in operation Average of NOK/day 10 000
Fixed cost Overhead cost, administration, insurance
Low fixed sum per day Main personnel cost is in % of catch value
• Significant increase in catch efficiency – Change in fleet – Availability of fish
• New vessels: – improvement in catch efficiency
– flexibility to par<cipate in alterna<ve fisheries
Catch efficiency Value drivers
Sensitivities – price and catch efficiency main factors Value drivers
5,000 10,000 15,000 20,000 25,000 0
Catch efficiency Price
Catch rate per day (Kg)
• Catch rates above 10,000 kg / day yield margin of around 60%
Personnel cost
Price Increase
Other costs
1.0
0.3
0.1
Increased EBITDA
0.6
• Price increase of 1.0 NOK/kg will give additional EBITDA of around 0.6 NOK/kg
EB
ITD
A /
kg
NOK EBITDA at different catch rates
§ Quotas 2016 § Cod -‐ same level as in 2015 § Haddock + 9 % § Saithe + 7 %
§ Q3 presenta<on – 6 November 2015 9 am § Hotel Con<nental – Oslo
§ Industry Handbook § www.havfisk.no/investor rela<ons/reports and presenta<ons
Outlook HAVFISK
• Health, convenience, environment and ethics – Fish is an important source of
protein, vitamins and minerals – The Norwegian fishing for cod,
haddock and saithe is certified by MSC standard for sustainable fisheries
– Fish is an environmentally friendly source of protein
• Growing focus on fish in retail – customer demands drives convenience
Long term mega trends Outlook
Aker Seafoods invests in the future!
Source: Prof Ray Hilborn, University of Washington
• The Food Gap Challenge towards 2050
Long term mega trends Outlook
69% increase in food
production will be necessary
The world needs more
seafood - less than 10 percent of food consumption is
sea-based
HAVFISK – ca 200 mill meals per year
Disclaimer
This Presenta<on includes and is based, inter alia, on forward-‐looking informa<on and statements that are subject to risks and uncertain<es that could cause actual results to differ. These statements and this Presenta<on are based on current expecta<ons, es<mates and projec<ons about global economic condi<ons, the economic condi<ons of the regions and industries that are major markets for HAVFISK ASA including subsidiaries and affiliates. These expecta<ons, es<mates and projec<ons are generally iden<fiable by statements containing words such as ”expects”, ”believes”, ”es<mates” or similar expressions. Important factors that could cause actual results to differ materially from those expecta<ons include, among others, economic and market condi<ons in the geographic areas and industries that are or will be major markets for HAVFISK`s businesses, fish prices, market acceptance of new products and services, changes in governmental regula<ons, interest rates, fluctua<ons in currency exchange rates and such other factors as may be discussed from <me to <me in the Presenta<on. Although HAVFISK ASA believes that its expecta<ons and the Presenta<on are based upon reasonable assump<ons, it can give no assurance that those expecta<ons will be achieved or that the actual results will be as set out in the Presenta<on. HAVFISK ASA is making no representa<on or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presenta<on, and neither HAVFISK ASA nor any of its directors, officers or employees will have any liability to you or any other persons resul<ng from your use.
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