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8th Annual Andean
Conference 2014-
Larrain Vial
Worldwide Fishing Industry
World fish supply
3
Usage of world fish supply
In the last 30 years, aquaculture has grown at a...
Fish oil main usage
Aquaculture fishmeal consumers
Fishmeal main usage
Indirect Human Consumption
4
Aquaculture is the pri...
Indirect Human Consumption
Fishmeal and Fish Oil prices
5
Limited supply and increasing demand has led to a gradual increa...
Suitable environment for anchovy due to the convergence of“Humboldt”and“El
Niño”currents.
Length of the coast with more th...
Indirect Human Consumption
Local unloading of IHC resources
7
Perú: important development of Indirect Human Consumption. A...
Perú: first producer of fishmeal in the world. Year 2011: 30%.
Perú, first exporter of fishmeal in the world. Year 2011: 4...
Perú: leading producer & exporter
Historical permited fishing days
9
Effective regulatory system: Individual Fishing Quota...
Pesquera Exalmar S.A.A.
Pesquera Exalmar S.A.A.
11
Leading competitive position with significant diversification potential.
More than 30 years in ...
Pesquera Exalmar S.A.A.
12
1992-1999 2000-2008 2009 2010 2011-2013
Revenues 1998:
US$ 19.5 mm
Revenues 2008:
US$ 117 mm
Re...
Indirect Human Consumption
13
Continuous improvement and solid presence in the IHC segment. Close
relationship with indepe...
Indirect Human Consumption
14
Fishmeal exports (*)
Historical processing (North-Center)
Fish oil exports (*)
China
Indones...
Own catch (North-Center)
Conversion factor for fishmeal
Plants capacity
Production (Thousand MT)
Operations
15
7%
6%
5%
4%...
North-Center Quota
Global Quota North-Center
16
Exalmar: 3rd largest producer of fishmeal and fish oil in Peru in terms of...
Exalmar’s own and third parties catch
Global Quota North-Center
17
Thousand MT
2nd season
2011
1st season
2012
Total
As of...
Direct Human Consumption
18
Consolidating its presence in DHC segment.
Development of new products lines: fresh and frozen...
Mackerel and Jack Mackerel
19
On February 6th 2014, Exalmar obtained the definitive license to operate the
frozen plant of...
Paita plant (other species)
20
2012
Paita Plant Production
MT
2013
3,425
6,082
Giant squid
Mahi mahi
Squid
Anchovy
Scallop...
Financial Performance
Revenues were affected by lower beginning stocks and lower production, higher
prices and more DHC revenues.
Gross margin w...
Revenues Composition
23
Revenues 2012 Revenues 2013
2012
Fishmeal Fish oil Anchovy DHC
US$ MM
2013
158
129
43
23 6 10
15
2...
IHC Revenues: Fishmeal & Fish Oil
24
60,000
45,000
30,000
15,000
0
1,000
1,750
1,500
1,250
1,000
Q111
Q211
Q311
Q411
Q112
...
Fishmeal and Fish Oil Stocks & Sales
25
Thousands MT 2012
Fishmeal
2013 Var.
Begininng stock
Production
Sales
Reprocessing...
DHC Revenues
26
Frozen
Fresh
Others
12%
83%
9%
88%
2012
US$ MM
2013
9,676
14,991
DHC Revenues 2012 DHC Revenues 2013
Incre...
Cost of Production
27
2012 2013 Var %
Ban days
Total Processed(*)
Own Catch*
Third Party*
Third parties buying price**
Cat...
Gross Profit and Net Income
28
Net Income affected by:
Lower quota.
Higher financial expenses
(bonds issuance in January 20...
Company debt
29
Issuance: US$ 200 MM in the
international capital market.
Issue Date: February 1st
, 2013.
Maturity Date: ...
CAPEX
30
IHC Investments:
Maintenance work on fishing nets.
Environmental requirements.
Fishmeal plants.
DHC Investments:
...
T. (511) 441.4420
F. (511) 441.4643
W. www.exalmar.com.pe
D. Av. Victor Andrés Belaunde 210, San Isidro, Lima Perú
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Pesquera Exalmar en 8th Annual Andean Conference 2014

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Pesquera Exalmar en 8th Annual Andean Conference 2014

  1. 1. 8th Annual Andean Conference 2014- Larrain Vial
  2. 2. Worldwide Fishing Industry World fish supply 3 Usage of world fish supply In the last 30 years, aquaculture has grown at an annual rate of ~8%, covering 40% of the fish supply as of 2011. Fish consumption is expected to continue growing given global trends towards healthier eating and increasing demand from developing markets. Wild catch levels are virtually stagnant due to conservation of biomass resources. Million MT + 35% + 1,097% 180 160 140 120 100 80 60 40 20 0 1981 1986 1991 1996 2001 2006 2011 Aquaculture Wild catch Million MT 140 120 100 80 60 40 20 0 2000 2002 2004 2006 2008 2010 Fresh Cured Frozen Canning + 49% + 14% + 48% + 27% Source: FAO
  3. 3. Fish oil main usage Aquaculture fishmeal consumers Fishmeal main usage Indirect Human Consumption 4 Aquaculture is the primary end use of fishmeal and fish oil, representing 68% and 78% of total production in 2011. Fishmeal and fish oil are highly demanded in aquaculture due to its high conversion factors, better immunity levels and adequate digestibility, reasons why they can not be substituted totally. Significant demand for piglets in China swine production and increasing demand of fish oil for Omega 3 extracts. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1960 1980 2008 2009 2010 2011 Others Pig Chicken Aquaculture 5% 8% 65% 63% 68% 73% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1970 1990 2009 2010 2011 Industrial Others Aquafeed 20% 10% 80% 70% 78% Shrimp Salmonids Marine Fish Others 27% 30% 21% 22% Shrimp Salmonids Marine Fish Others 27% 30% 21% 22% Source: FAO, IFFO
  4. 4. Indirect Human Consumption Fishmeal and Fish Oil prices 5 Limited supply and increasing demand has led to a gradual increase in fishmeal and fish oil prices. The price depends on the following factors: Total amount of fishmeal produced. Quality of the fishmeal which is a function of the quantity of protein (TVN) and the freshness of the anchovy (histamine). The increase of fishmeal prices is mainly driven by: Low grade of substitution. Increasing demand and flat supply: restrictions on the amount allowed to be fished of anchovies. US$ / MT Fish oilFishmeal2,500 2,000 1,500 1,000 500 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (*) (*) Data as of February 2014. Source: IFFO.
  5. 5. Suitable environment for anchovy due to the convergence of“Humboldt”and“El Niño”currents. Length of the coast with more than 2,000 km. Local unloading of fish resources Indirect Human Consumption 6 Perú: historical presence of fish resources. Favorable macroeconomic fundamentals and unique geographic aspects. Source: PRODUCE 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Thousand MT 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
  6. 6. Indirect Human Consumption Local unloading of IHC resources 7 Perú: important development of Indirect Human Consumption. Anchovy: only authorized resource for IHC industry, with high protein levels. Peruvian anchovy has significant advantages over other species: Not a migratory fish. Short development: reproduction cycle of 6 months. Close presence to the coast. Source: PRODUCE 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Thousand MT 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
  7. 7. Perú: first producer of fishmeal in the world. Year 2011: 30%. Perú, first exporter of fishmeal in the world. Year 2011: 41%. Opportunity to generate added value. World fishmeal production (2012) World fishmeal exports (2012) Perú: leading producer & exporter 8 Leading producer & exporter of fishmeal and fish oil. Due to low presence of aquaculture in Perú, production is oriented to international market. Source: IFFO. Peru China Thailand Chile USA Others 42% 18% 12% 11% 11%6% Peru Chile Denmark USA Iceland Others 32% 43% 4% 5% 6% 10%
  8. 8. Perú: leading producer & exporter Historical permited fishing days 9 Effective regulatory system: Individual Fishing Quotas (ITQ), leads the industry to focus on quality and efficient usage of fleet and plants. Before - Global Quota System (“Olympic Race”): Competition between participants. Focus was on increasing speed. Inefficient operations and reduced quality of fishmeal and fish oil. Environmental contamination. Short fishing season. Since 2009- Individual Transferable Quota System: Individual quota assigned by vessel. Overall fleet reduction (1,200 to 500). Lower fixed costs. Extension of the fishing season. Better planning of production and diversification. Efficiency and better quality. ITQ Olympic Race 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 227 200 175 147 105 48 47 49 179 128 174 161 157
  9. 9. Pesquera Exalmar S.A.A.
  10. 10. Pesquera Exalmar S.A.A. 11 Leading competitive position with significant diversification potential. More than 30 years in the industry. Diversification in Direct Human Consumption (DHC). Plants strategically located throughout the Peruvian coast, with 6 processing plants, 2 frozen plants and 1 unloading line. 21 vessels in operation with 7,181 m3 storage capacity and 6 with Refrigerated Sea Water “RSW”(2,600 m3) also used for DHC. Certifications include GMP B2, IFFO, BASC and OHSAS 18001. For 2014: ISO 14001 and BRC. N-C S
  11. 11. Pesquera Exalmar S.A.A. 12 1992-1999 2000-2008 2009 2010 2011-2013 Revenues 1998: US$ 19.5 mm Revenues 2008: US$ 117 mm Revenues 2009: US$ 128 mm Revenues 2010: US$ 183 mm Revenues 2012: US$ 217 mm Investments in Plants and vessels IPO and additional quota acquisition Higher ITQ and Direct Human Consumption Sound financial strategy ITQ system adjustment Acquisition of processing plants: 1992 Casma 1995 Tambo de Mora 1997 Huacho 1999 Chicama. Building of new vessels 2004: issuance of short term notes in Peru. 2007: Private Equity takes 22.7% stake in the company. 2008: Syndicated loan (USD 80MM). Fix cost reduction: only 14 vessels operate the first year of ITQ. Investments in Direct Human Consumption. Listing on Lima Stock Exchange with capital injection of US$ 100MM. Acquisition of additional quotas reaching 6.45% of north center area and 4.34% in the south area. Strengthen Direct Human consumption (DHC). RSW system to 6 vessels. 2011: Syndicated loan US$ 140 MM 2012: New DHC Plant in Paita. 2013: New DHC Plant in Tambo de Mora. All fishmeal plants with Steam dried system. Bonds issuance of US$ 200 MM (January 2013)
  12. 12. Indirect Human Consumption 13 Continuous improvement and solid presence in the IHC segment. Close relationship with independent vessel owners. 6 plants with 434 MT/hour of total installed capacity, strategically located along Peruvian coast. All plants operate with Steam Dried System. Overall improvement of fishmeal quality. 21 operating vessels with an assigned quota of 6.45% in the North-Center region and 4.34% in the South region. The Company exports substantially all of the produced fishmeal to investment grade countries. Exalmar’s ability to buy third party catch allows the Company to: Increase its share of production beyond assigned quota. Make better use of facilities. Generate a higher total EBITDA. Reduce fixed costs.
  13. 13. Indirect Human Consumption 14 Fishmeal exports (*) Historical processing (North-Center) Fish oil exports (*) China Indonesia Taiwan Chile Vietnam Others 76% 8% 4% 3% 3% 6% Denmark Chile Norway Japan China 32% 3% 62% 2005 700 600 500 400 300 100 200 0 2006 2007 2008 2009 2010 2011 2012 2013 Own catch (%) Third party (%) 392 271 328 372 523 364 622 397 466 40% 47% 35% 26% 45% 43% 45% 39% 45% 60% 53% 65% 74% 55% 57% 55% 61% 55% (*) Data as of December 2013.
  14. 14. Own catch (North-Center) Conversion factor for fishmeal Plants capacity Production (Thousand MT) Operations 15 7% 6% 5% 4% 3% 2% 1% 0% 400 350 300 250 200 150 100 5 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 234 144 212 276 287 177 339 240 269 2.70% 2.40% 3.50% 4.50% 4.90% 5.70% 6.45% 6.45% 6.45% Catch (Thousand MT) Exalmar's Catch / Global Catch 2005 2006 2007 2008 2009 2010 2011 2012 2013 23.3% 22.6% 22.5% 22.8%22.8% 23.4% 23.2% 22.8% 22.8% 2005 2006 2007 2008 2009 2010 2011 2012 2013 106 17 74 17 92 12 61 13 91 21 83 18 85 19 144 31 119 25 Fishmeal Fish oil Name Capacity IHC (MT/hr) Total 434 10 100 90 84 50 100 Capacity DHC (MT/day) 683 108 575 Paita Chicama Chimbote Huacho Callao Tambo de Mora
  15. 15. North-Center Quota Global Quota North-Center 16 Exalmar: 3rd largest producer of fishmeal and fish oil in Peru in terms of volume, supplementing its quota via third-party catch from independent fishermen. Company 1st season 2013 14.10% 10.76% 8.50% 6.86% 6.51% 6.45% 6.21% 40.61% 1 2 3 4 5 6 7 8 Others 2nd season 2013 14.10% 10.76% 8.50% 6.86% 6.51% 6.45% 6.21% 40.61% % of Total Processed Company 1st season 2013 22.71% 15.24% 10.83% 10.55% 10.24% 9.72% 7.57% 13.11% 1 2 3 4 5 6 7 8 2nd season 2013 23.77% 16.16% 11.83% 9.85% 8.25% 8.70% 7.35% 14.09%Others Anchovy individual fishing quota: 6.45% in North- Centre and 4.34% in the South. Independent fisherman typically sell their assigned quota to larger companies. Exalmar’s ability to buy third party catch allows it to increase its share of national production. Strong business relationship with independent vessel owners: (i) Providing financial and operational advisory, (ii) Offering onshore and offshore fishing logistical support, (iii) Structuring tailor-made anchovy purchase agreements. Source: Produce. Source: Produce.
  16. 16. Exalmar’s own and third parties catch Global Quota North-Center 17 Thousand MT 2nd season 2011 1st season 2012 Total As of December 2012 Global Quota Effective catch Effective catch/ Quota (%) Exalmar’s catch participation Season 2,500 2,448 97.9% 11.6% 23/11-31/01 2,700 2,623 97.1% 10.6% 02/05 - 31/07 5,200 5,071 97.5% 2nd season 2012 1st season 2013 Total As of December 2013 810 732 90.4% 11.2% 22/11-31/01 2,050 1,993 97.2% 10.8% 17/05-31/07 2,860 2,725 95.3% 2012 Thousand MT Third parties 2013 396.7 466.4 156.2 240.5 197.8 268.6 Own catch Effective catch of 2013 (2,725 thousand MT) represents 53.7% of 2012 (5,071 thousand MT). The quota of 2nd season 2013 (2,304 thousand MT) allowed an increase of production on November and December 2013. 2nd season 2013: Effective catch: 98.7%. Exalmar’s participation: 11.7%.
  17. 17. Direct Human Consumption 18 Consolidating its presence in DHC segment. Development of new products lines: fresh and frozen fish. Constant monitoring of the world market trends to diversify offer and generate products with increased added value. Extension of relationship with independent fishermen. Development of social responsibility projects to promote the adequate use of marine resources. Public bidding for tuna quota: Exalmar awarded part of lot 1, corresponding to 739.94 m3. Mahi Mahi Mackerel Jack Mackerel Giant Squid
  18. 18. Mackerel and Jack Mackerel 19 On February 6th 2014, Exalmar obtained the definitive license to operate the frozen plant of Tambo de Mora. Also, on February 27th obtained the final authorization to operate three more mackerel and jack mackerel fishing vessels for Direct Human Consumption. Mackerel and Jack Mackarel 2011 Total 434 Global quota C-N Effective catch Exalmar’s catch Exalmar’s catch participation 240,000 233,660 9,270 4.0% 2012 434 160,000 112,310 6,777 6.0% 2013 434 106,000 60,329 3,941 6.5% 2014 (*) 434 152,000 - - - (*) Season started on January 16th and will finished on December 31st.
  19. 19. Paita plant (other species) 20 2012 Paita Plant Production MT 2013 3,425 6,082 Giant squid Mahi mahi Squid Anchovy Scallops84% 13% 3% 87% 4% 3% 4% 2% Production 2012 Production 2013
  20. 20. Financial Performance
  21. 21. Revenues were affected by lower beginning stocks and lower production, higher prices and more DHC revenues. Gross margin was affected by lower revenues and higher ban expenses. Net income affected by lower quota and higher financial expenses. P&L Composition 22 Millions of US$ 2012 2013 Var % Revenues Gross Profit Operating Income Pre-Tax Income Net Income EBITDA % of revenues Gross Margin Operating Margin Net Income Margin EBITDA Margin $217.0 $58.6 $34.8 $27.3 $21.2 $60.6 27% 16% 10% 28% $168.9 $40.9 $21.0 ($4.8) $0.7 $41.6 24% 12% 0% 25% -22% -30% -40% -31%
  22. 22. Revenues Composition 23 Revenues 2012 Revenues 2013 2012 Fishmeal Fish oil Anchovy DHC US$ MM 2013 158 129 43 23 6 10 15 2 Fish meal Fish oil Anchovy DHC 20% 4% 73% 14% 9% 76%
  23. 23. IHC Revenues: Fishmeal & Fish Oil 24 60,000 45,000 30,000 15,000 0 1,000 1,750 1,500 1,250 1,000 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Volume Average Sales Price (US$/MT) Fishmeal 14,000 10,500 7,000 3,500 0 2,500 2,100 1,700 1,300 900 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Fish oil (*) Volume Average Sales Price (US$/MT) Thousands MT 2012 Fish oil Revenues MT US$/MT Fish Oil Revenues(US$) 28,264 1,532 $43,302 11,628 1,979 $23,008 2013 Thousands MT 2012 Fishmeal Revenues MT US$/MT Fishmeal Revenues(US$) 120,226 1,315 $158,155 79,903 1,616 $129,103 2013 (*) Fish oil considers also low quality production surplus.
  24. 24. Fishmeal and Fish Oil Stocks & Sales 25 Thousands MT 2012 Fishmeal 2013 Var. Begininng stock Production Sales Reprocessing Ending stock 40.6 90.6 120.2 0.1 11.1 11.1 106.2 79.9 1.3 38.7 -73% 17% -34% 249% Thousands MT 2012 Fish oil 2013 Var. Begininng stock Production Sales Reprocessing Ending stock 80.2 21.4 28.3 0.1 1.4 1.0 17.1 11.6 -0.0 6.5 -88% -20% -59% 360% 2012 Production Sales Thousand MT 2013 90.6 106.2 120.2 79.9 2012 Production Sales Thousand MT 2013 21.4 17.1 28.3 11.6
  25. 25. DHC Revenues 26 Frozen Fresh Others 12% 83% 9% 88% 2012 US$ MM 2013 9,676 14,991 DHC Revenues 2012 DHC Revenues 2013 Increase in revenues of 55%, explained by the higher production of Paita Plant (+78%).
  26. 26. Cost of Production 27 2012 2013 Var % Ban days Total Processed(*) Own Catch* Third Party* Third parties buying price** Catch Cost(**) Cash Catch Cost(**) Processing Cost (***) Cash Processing Cost (***) Ban Expenses (US$MM) 204 397 241 156 318 88 78 216 196 27 208 466 269 198 299 110 96 230 195 27 2% 18% 12% 27% -6% 25% 23% 7% -1% -1% Ban & Processed Volume Costs It was recorded 208 ban days, which reflected in higher ban expenses (16% of revenues vs. 12% of 2012). Increase of fuel and personal costs led to higher catch cost (+23%). Higher volume from third parties affected the third parties buying price (-6%). (*) Thousand MT. (**) US$/MT of anchovy. (***) US$/MT Fishmeal & Fish Oil
  27. 27. Gross Profit and Net Income 28 Net Income affected by: Lower quota. Higher financial expenses (bonds issuance in January 2013). 2012 Cost of Sales Ban Expenses Gross Margin 2013 60% 12% 27% 60% 16% 24% 2012 Gross margin Operating margin Net Income margin EBITDA margin US$ MM 2013 27% 24% 16% 12% 0%10% 28% 25% Gross profit was affected by: Lower revenues (-22%). Higher ban expenses (16% of revenues vs. 12% of 2012) and non production costs of DHC (+1.2 US$ MM).
  28. 28. Company debt 29 Issuance: US$ 200 MM in the international capital market. Issue Date: February 1st , 2013. Maturity Date: January 31st , 2020. Interest: 7.375% per annum. Use of proceedings: repay the syndicated loan (US$ 140 MM), while balance will be used for several company investments. Active Leasing operations funding for Freezing Plant (DHC). Bonds Debt (Million US$) 56 207 264 7 Short term debt Long term debt Total debt Cash Net debt 257 2012 Net Financial Expenses US$ MM 2013 9.4 26.8
  29. 29. CAPEX 30 IHC Investments: Maintenance work on fishing nets. Environmental requirements. Fishmeal plants. DHC Investments: Tambo de Mora Plant. Paita Plant. RSW Vessels for DHC. CAPEX composition 2013 IHC Plants Vessels Administratives DHC Plants 45% 35% 15% 5% 2005 2006 2007 2008 2009 2010 2011 2012 2013 41.5 5.2 5.2 16.5 20.3 12.8 14.2 27.8 44.4 US$ MM
  30. 30. T. (511) 441.4420 F. (511) 441.4643 W. www.exalmar.com.pe D. Av. Victor Andrés Belaunde 210, San Isidro, Lima Perú

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