Norway’s largest harvesting company and quota holder – 11% of the Norwegian whitefish quota (cod, saithe, haddock) – Quotas for shrimp
•
10 operational trawlers
•
Three new vessels delivered – Gadus Poseidon delivered Q3/13, Gadus Njord delivered Q4/13 and Gadus Neptun delivered Q1/14 – Fully financed with bank loan and equity
•
382 employees
#1 new build: “Gadus Poseidon”
1
Company overview
Company structure and vessels Vesttind
Nordland Havfiske (100% ownership)
Finnmark Havfiske
Havtind
(97,62% ownership)
Hammerfest Industrifiske
Kongsfjord
Gadus Poseidon
(60% ownership)
Gadus Njord Melbu
Doggi
Rypefjord Båtsfjord
K.Arctander
Gadus Neptun
Stamsund Stamsund
Mehamn Honningsvåg
Kjøllefjord
Hammerfest Båtsfjord Vardø
3
Value drivers
Cost breakdown 300 250
(based on 2013 figures)
60 %
Cost (MNOK) % of revenue
249
200
Cost
72
49 6%
21 3%
51 7%
9% Freight / packaging
Drivers
30 %
127 16 %
50 0
40 %
32 %
150 100
50 %
20 % 10 % 0%
Fuel
Fishing gear
Personnel
Maintenance
Administration
Percentage of catch value
Cost per day in operation
Cost per day in operation
Low fixed sum per day
Cost per day in operation
Fixed cost
Cost per kilo
Average consumption for a freezing trawlers = 10 000 litres/day
Average of NOK /day 6 300,-
Main personnel cost is in % of catch value
Fixed cost : yearly maintenance in ship yards
Overhead cost, administration, insurance
Other personal costs
4
2
Value drivers
Sensitivities – price and catch efficiency main factors Catch efficiency
Price NOK
EBITDA at different catch rates
1.0
EBITDA / kg
0.3
0
5,000
10,000
15,000
20,000
0.1
0.6
Other costs
Increased EBITDA
25,000 Price Increase
Catch rate per day (Kg)
• Catch rates above 10,000 kg / day yield margin of around 60%
Personnel cost
• Price increase of 1.0 NOK/kg will give additional EBITDA of around 0.6 NOK/kg
Value drivers
Catch efficiency • Significant increase in catch efficiency – Change in fleet – Availability of fish
• New vessels will contribute to further improvement in catch efficiency
25 000 Kg/operating day 20 000
15 000
10 000
5 000
0 2007
2008
2009
2010
2011
2012
2013
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Value drivers
Historic price trend - Cod •
Strong supply growth and financial downturn in key markets have negative impact on cod prices.
•
Cod-prices appears to have bottomed out in Q2/2013 for frozen products.
Export prices for cod h/g in NOK. Source: Norwegian Seafood Council
Value drivers
Volume • High potential for volume growth with increased capacity – Saithe and shrimps - catch the entire quotas
• 2014 quotas gives potential – Cod at same level as 2013 – Reduction in saithe quota of 21% – Reduction in haddock quota of 9%
Spawning stocks of cod, haddock and saithe
4
Value drivers
Operational efficiency – potential upside •
EBITDA/kg – potential to increase –
•
Flexible fleet - more efficient fishery
Three new trawlers - all in operation by q1/14 – –
“Gadus Poseidon” with record catch rate of 93 MT/day Weekly catch of 450 MT
Renewal of the fleet gives more operating days and lowers maintenance costs - > Reduced cost per kilo harvested
Our best trawler made 10,13 MNOK/quota EBITDA in 2013 – –
Average for Havfisk: 6,9 MNOK/quota 2011 best performer: 14,5 MNOK/quota
Value drivers
Asset pricing Recent transactions[1]
Implication for HFISK •
NOKm / cod license Jergul
•
91
•
Granit
120
Langvin
110
HFISK holds 29.6 cod licenses (before sale of Jergul) with book value of 35 MNOK / license Implied pricing based on current market capitalization is around MNOK 22 / licence (P/B ~0.6) Recent transactions imply a significant upside potential
Implicit value per share [2] NOK / share
11 Lysnes
33 23
16
90 35m
50m
70m
100m
NOK / cod license
Significant upside potential for HFISK based on recent asset transactions Kilder: Havfisk / Pareto research
[1]: Estimated based on available information
[2] Assuming Book Value of all other assets
5
Value drivers
Mega trends • 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
Source: Prof Ray Hilborn, University of Washington
Aker Seafoods invests in the future!
Summary - outlook • Stronger operations – potential to improve further • Positive quota outlook – potential to increase quota utilization • Quota assets undervalued
