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Salmones Camanchaca Grapples with Profit Collapse Amidst Industry Challenges

The clamor of harvest echoed differently—a commendable surge of 24%, culminating in 17,760 metric tons of Atlantic salmon, a number that stood resolute against the tide of adversity

The big Chilean salmon farmer Salmones Camanchaca suffered a price collapse during the July to September third quarter period and operating revenue fell despite higher harvest volumes, the company has disclosed.
The big Chilean salmon farmer Salmones Camanchaca suffered a price collapse during the July to September third quarter period and operating revenue fell despite higher harvest volumes, the company has disclosed.

Navigating Turbulence: Salmones Camanchaca’s Resilience Amidst Industry Challenges

The intricate dance between market dynamics and operational challenges has cast a shadow on the once buoyant sails of Salmones Camanchaca, a key player in the Chilean salmon farming landscape. The third quarter of this year bore witness to a profound struggle, a tale of profit collapse despite burgeoning harvest volumes and operational dexterity.

Within the span of July to September, the hallowed halls of Salmones Camanchaca echoed with a disheartening revelation—the operating revenue, once a testament to prosperity, had dwindled to a mere US $82.1 million (£66 million). A stark decline of 14% from the comparable quarter in 2022 painted a grim picture, attributing this downturn to a duo of adversaries: plummeting sales prices and an unforgiving surge in operational costs.

The crescendo of despair found its voice in the statistics—a glaring 13% dip in sales prices for Atlantic salmon, compounded by an alarming 24% decline for Coho salmon compared to the preceding year. The clamor of harvest echoed differently—a commendable surge of 24%, culminating in 17,760 metric tons of Atlantic salmon, a number that stood resolute against the tide of adversity.

Yet, the promise held within those abundant harvests seemed an illusion, a mirage that dissipated upon closer scrutiny. The scales tipped askew, with sales volumes amassing to a mere 11,311 metric tons (WFE) by September’s end, juxtaposed against an inventory swelling beyond 9,000 metric tons (WFE).

Salmones Camanchaca unveiled the prime malefactors in this narrative—lower sales prices, juxtaposed against the burden of escalated operational costs.

The cost of harvested Atlantic salmon (ex-cage live weight) soared by an unyielding 12%, weighing heavily at US $4.69/kg. Two influential sites bore the brunt, besieged by Salmon Rickettsial Syndrome outbreaks and the omnipresent spectre of sea lice. The consequences rippled through, necessitating escalated treatment costs that added to the fiscal woes.

The financial toll was staggering, painting a bleak canvas where the EBIT per kilogram for both Atlantic and Coho salmon were mere shadows of their former selves.

From the lofty US $1.78 per kilogram a year prior, Atlantic salmon plunged to a meager US $0.005 this year. The descent of Coho salmon was an even more harrowing tale, spiraling from a positive $1.16 to a distressing minus $US 0.54 per kg during this tumultuous quarter.

Ricardo García, the Vice Chairman of Salmones Camanchaca, stood amidst this tempest, offering insight into the unfolding saga. He conceded to the industry’s vulnerability, an ebb in global demand that resonated as weakened prices, echoing through the halls of the company’s operations.

Amidst the adversity, García sought solace in the silver linings, championing the company’s adaptability and resilience. The strategic pivot towards more appealing formats and discerning markets enabled Salmones Camanchaca to secure prices beyond the confines of the market’s reference points.

García’s gaze, however, extended beyond the confines of the turbulent present, envisaging a future infused with promise. While acknowledging the lingering challenges for the remainder of 2023, his optimism illuminated the horizon.

He foretold improved health performance, a prospect of mitigated cost pressures for early 2024 harvests, and the glimmer of hope reflected in the promise of better prices looming on the horizon.

In this narrative of adversity and perseverance, Salmones Camanchaca emerges as a beacon, weathering the storm that rocked the foundations of the salmon farming industry. Amidst the chaos, their unwavering resolve stands testament to resilience in the face of adversity, offering hope in the wake of turbulent waters.

 


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