August 22, 2018 / 9:44 AM / a month ago

Disease and parasites hit fish farmer Marine Harvest

* Cuts 2018 output forecast by 5 pct

* Shares fall 2.9 pct

* Rivals Grieg and Leroey also suffering

By Ole Petter Skonnord and Terje Solsvik

OSLO, Aug 22 (Reuters) - Marine Harvest, the world’s largest fish farmer, cut its 2018 output forecast by five percent on Wednesday, blaming industry-wide problems with disease and parasites.

Salmon pens in Norway, Scotland and Canada have been hit by sea lice, heart failure, pancreatic disease and other illnesses, the company said, while in Chile hundreds of thousands of salmon escaped from cages during a storm.

The Oslo-listed company now expects to produce 380,000 tonnes of salmon this year, down from the 400,000 tonnes it forecast in May and below the average estimate of 404,000 tonnes in a Reuters poll of analysts.

While outbreaks of disease and lice are common in the industry, the size of the output cut took analysts by surprise.

“We had expected lower volume guidance, this cut is however much higher than expected,” brokerage Nordea Markets wrote in a note to clients, adding it would reduce its forecast for full-year operating earnings by 3-5 percent.

Competitor Grieg Seafood also scaled back its 2018 production plan on Wednesday, while Leroey Seafood missed second-quarter earnings forecasts.

At 0910 GMT, Marine Harvest’s shares were down 2.9 percent, while Grieg was down 5.4 percent and Leroey down 2.8 percent.

Marine Harvest’s second-quarter operating earnings came in at 175 million euros ($200 million), in line with the company’s preliminary report released in July.

“Although second quarter numbers are in line, outlook for the remaining year is on the weak side,” Sparebank 1 Markets said, adding full-year earnings forecasts would be lowered.

Grieg Seafood blamed the cut in its production forecast on an outbreak of pancreatic disease in Norway and of algal bloom in Canada. Algae can damage fish gills.

Still, the companies said demand for salmon remained solid, with prices likely to recover from a recent slump. Consumers are looking for healthier sources of protein, with many turning to salmon.

“It’s an extremely strong market,” Marine Harvest Chief Executive Alf-Helge Aarskog said. “I expect a very good year next year as well,” he added. ($1 = 0.8744 euros) (Editing by Gwladys Fouche and Mark Potter)

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