Salmones Camanchaca SA · BCS:SALMOCAM
Salmones Camanchaca SA — Camanchaca — Q1 2016 Earnings Presentation
30 slides from Salmones Camanchaca SA's earnings presentation, Jun 2, 2016
Slide 1: Camanchaca
s© Camanchaca a)
Slide 2: Revenues: Jan – Mar
All figures in millions of dollars Revenues: Jan – Mar +7% 2015 2016 110.9 +8% 103.8 82.8 76.9 +7% -1% 19.4 20.7 7.4 7.3 Fishing Salmon Other Seafood TOTAL 2
Slide 3: Results Jan – Mar
Results Jan – Mar EBITDA (before Fair Value) 2015 2016 8.2 4.1 0.3 -1.2 -0.2 -4.3 -6.0 -7.3 Fishing Salmon Other Seafood TOTAL Profit/Loss 4.3 1.4 -0.3 -0.5 -3.0 -2.7 -3.6 -7.0 Fishing Salmon Other Seafood TOTAL 3
Slide 4: Development: Last 4 mobile quarters
Development: Last 4 mobile quarters EBITDA Revenues X% EBITDA/Revenues 496 489 483 485 459 462 453 446 13.3% 12.4% 439 12.0% 11.0% 66.1 60.0 58.7 10.2% 10.0% 53.0 45.1 47.1 5.6% 4.9% 25.5 2.3% 21.6 10.1 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 4
Slide 5: Pelagic Fishing
Pelagic Fishing Anchovy: No catches due to impact of El Niño. Thousands of tons 27 95 21 22 20 18 87 1 2015 2016 2015 2016 E 2015 2016 2015 2016 2015 2016 E Q1 Q2 Q3 Q4 Year Anchovy catches include own and third parties. Company’s estimations are based on current information, which could change due
Slide 6: Pelagic Fishing
Pelagic Fishing J. Macker.: Favorable fishing conditions (56% of the annual quota catched in 1Q 2016). Sardine: Higher catches vs Q1 2015, but low presence in the 8th region (third parties). Thousands of tons 115 Jack Mackerel Sardine 89 42 31 23 44 4 73 19 29 22 23 45 19 8 7 2 2015 2016 2015 2016 E
Slide 7: Fishmeal Price
Fishmeal Price Prices hit a peak in Q1 2015, and fell after normalization of the Peruvian quotas. Current prices show recovery due to the effects of El Niño and expectations of lower quota for Peru (under 2 M ton). US$ / ton (Camanchaca) Peru’s Fishing Quota (North-Centre Region): May to Jul: Nov to
Slide 8: China: port off-takes and stocks
China: port off-takes and stocks Stocks in China bellow the average and higher port off-takes to final consumers Source: IFFO 8
Slide 9: Stocks
Stocks (valued at cost) March 31, 2016 December 31, 2015 March 31, 2015 Months of VOLUME ThUS$ VOLUME ThUS$ ThUS$ Production SALMON Atlantic Salmon (Tons) 4,864 2.2 34,089 7,458 42,198 32,940 Salmon Total 34,089 42,198 32,940 FISHING Fishmeal (Tons) 7,873 1.8 8,136 5,793 6,937 12,454 Fish oil (Tons)
Slide 10: Algae Bloom in Chile: Feb-Mar 2016
Algae Bloom in Chile: Feb-Mar 2016 • Industry impact: neighborhoods 1, 2, 3, 6, 7 and 10 (10th region) • Mortality of ~25 million fish • 45 sites affected • Estimated impacts for Camanchaca: • 93% mortality in 3 sites (~2.7 million fish) • Estimated Direct Impact after insurances: US$ 5 – 7 million
Slide 11: Atlantic Salmon Sanitary Conditions
Atlantic Salmon Sanitary Conditions (closed cycle) Mortality 2015 2016 64.3% 43.0% 20.0% 14.2% 12.9% 8.7% 5.4% 10.9% 40% 15% Q1 Q2 Q3 Q4 Year Economic Feed Conversion Rate 2.88 1.60 1.90 1.35 1.30 1.36 1.35 1.35 1.80 1.40 - Q1 Q2 Q3 Q4 Year Company’s estimations are based on current information, whi
Slide 12: Cost reduction
Cost reduction Atlantic Salmon - Cost ex-cage liveweight (US$ / kg) 3.72 3.81 3.66 3.35 Others 3.07 2.95 3.02 3.08 2.92 Medicine Labor Smolt OPEX Feed Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 3.41 3.01 Impacts in Q4-15 and Q1-16 due to SRS and lower oxygen in the 10th
Slide 13: Atlantic Salmon Price
Atlantic Salmon Price Prices upwards due to decreasing global supply. 2016 lower harvests due to algae bloom. Harvest (Thousands of Tons) Price (US$ / Kg WFE) 2015 2016 5.5 5.2 4.8 4.5 4.4 4.4 4.2 Δ+22% Δ+18% 4.1 Δ-12% 15.6 43 11.6 11.2 30 9.1 6.5 4.9 E E Q1 Q2 Q3 Q4 Year Company’s estimations are b
Slide 14: Atlantic Salmon Price: Long-term trend
Atlantic Salmon Price: Long-term trend Urner Barry Equivalent Trim C 2-3 *- US$/Lb 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 may-16 jan-04 jul-04 jan-05 jul-05 jan-06 jul-06 jan-07 jul-07 jan-08 jul-08 jan-09 jul-09 jan-10 jul-10 jan-11 jul-11 jan-12 jul-12 jan-13 jul-13 jan-14 jul-14 jan-15 jul-15 jan-16
Slide 15: Hike in price
Hike in price Prices every week: Chilean salmon (UB trim D 3-4 lb) UB price hike to levels of US$ 5.95 /lb Source: ABG Sundal Collier (05/16/2016) 15
Slide 16: Camanchaca's Atlantic Salmon RMP
Camanchaca’s Atlantic Salmon RMP Camanchaca vs Market (Salmonex, January 2013 = Base 100) Urner Barry Salmonex Camanchaca 180 160 140 120 100 80 60 abr-15 abr-13 oct-13 abr-14 abr-16 jul-13 jul-14 oct-14 jul-15 oct-15 ene-13 ene-14 ene-15 ene-16 March 2016: Camanchaca prices below UBarry and Salmone
Slide 17: Price GAP 2016
Price GAP 2016 By Country Average price per Lb - Miami - Fillet Trim D 2-4 (Norway Price = Base 100) 120 100 83 80 63 60 40 20 0 Jan Feb Mar Apr May Chile Norway Canada Price GAP reduction in the last 5 months 17
Slide 18: Development of Atlantic Salmon Margins
Development of Atlantic Salmon Margins Negative margin in Q1 2016, but reversed in April Leptepu 10th region sites 11th region sites Raw Material Cost and RMP (Raw Material Return) Cahuelmó Base 100 = RMP January 2013 Porcelana Leptepu |-----Ahoní-----| Loncochalgua Benjamín Licha 210 Puelche Johnso
Slide 19: Development of Atlantic Salmon Margins
Development of Atlantic Salmon Margins EBIT (US$/Kg WFE) before Fair Value 1.0 0.87 0.8 0.6 0.4 0.2 0.0 -0.2 -0.4 -0.6 -0.72 -0.8 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 0.64 -0.10 Atlantic Salmon Business includes other Revenues and Costs due to services and sales to
Slide 20: Benchmarking Jan – Mar 2016 Salmon Producers
Benchmarking Jan – Mar 2016 Salmon Producers with Public Information Gross Margin (before FV) x Revenues -16 -14 -12 -10 -8 -6 -4 -2 0 0% E5 -2% Camanchaca -4% E4 -6% E2 E1 -8% -10% -12% -14% E6 -16% E3 -18% -20% Gross Margin (before FV) / Revenues 20
Slide 21: Crisis in Chiloé
Crisis in Chiloé Presence of red tide (Alexandrium Catenella) in the 10th region causes social conflicts in Chiloé SALMON • Stoppage of primary process plants (17 days): • Calbuco: 10th region harvest processing plant • Quellón: 11th region harvest processing plant • Detention of harvests, productio
Slide 22: Diesel Price: favorable effects on costs
Diesel Price: favorable effects on costs US$/lt 2015 2016 0.54 0.54 -44% 0.49 0.50 0.40 0.43 0.40 0.30 0.35 0.35 Q1 Q2 Q3 Q4 Year Q1 2016: A constant volume, fuel savings of US$ 1.1 million. Company’s estimations are based on current information, which could change due to deviations 22
Slide 23: Changes in salmon density regulation
Changes in salmon density regulation To limit growth, Subpesca made an amendment of the density regulation in order to: Define the maximum number of smolt transfer for each grow-out site based on individual losses of the previous cycle, with stricter punishment. Establish a stricter biosecurity
Slide 24: Table of Individual losses
Table of Individual losses Applies to the grow-out sites according to the actual loss calculated as: Smolt transfer - Harvest + 2% Smolt transfer Current table % loss Smolt transfer reduction for the Biosecurity score productive cycle next cycle 0% - 15% High Approved technical project 15,1% - 18% M
Slide 25: Neighborhood score
Neighborhood score Environmental element: unchanged Environmental impact (INFA) Score Weighing % of sites operating with a positive last INFA 75,1% - 100% 100 50,1% - 75% 75 10% 25,1% - 50% 50 0% - 25% 25 Change in sanitary element Current table Losses Score Weighing 0% - 15% 100 15,1% - 17% 75 65%
Slide 26: Neighborhood score
Neighborhood score Change in productive element Current table Smolt transfer projections Score Weighing (relative to the previous period) 0 - 100% 100 100,1 - 110% 75 25% 110,1 - 120% 50 More than 120% 25 New table Smolt transfer projections Score Weighing (relative to the previous period) 0% - 60%
Slide 27: Neighborhood score
Neighborhood score Change in density table Current table Total Biosecurity Maximum Salar Individual site Maximum Salar biosecurity score Level density (kg/m3) biosecurity density (kg/m3) 85,1 - 100 High 17 - 17 64,1 - 85 Medium 15 High (losses < 13%) 17 43,1 - 64 Low 1 13 High (losses < 13%) 15 0 -
Slide 28: Neighborhood score
Neighborhood score Example Base data: 1. Neighborhood with: • 80% positive INFA • 16% losses in previous cycle • Smolt transfer projection: +4% growth 2. Individual site had 1 million of smolt transfer in the previous cycle with 14% of losses and wants to growth 5% in the next cycle Old regulation:
Slide 29: Debt payment on May 25
Debt payment on May 25 Refinanced debt in May 2013: US$ 234 million On May 25, 2016: a payment of US$ 15.6 million is made: Amortization quota: US$ 8.5 million Cash Sweep (Southern fishing): US$ 4.5 million Interests: US$ 2.6 million Debt balance after payment: US$ 196 million 29
Slide 30: Camanchaca
“sf Camanchaca