Cermaq ASA (OSL:CEQ) Trading Update Regarding Quarter 4, 2008 Results

Cermaq ASA (OSL:CEQ) Cermaq will report a reduced financial result for quarter 4, 2008 due to various issues impacting on the profitability of its operations.

Chile The situation regarding disease, specifically on ISA, has deteriorated significantly in the last few months. The industry has seen a sharp increase in the number of new cases of ISA and Cermaq operations have had 10 new cases of ISA since the end of September.

The new outbreaks have affected some licenses with larger fish of 2kg+ and others with fish under 500g. The company has decided to cull 3 sites with smaller fish and accelerate the harvest of the sites with larger fish and sell these fish at lower than optimal sizes, with a consequential lower revenue than anticipated. In addition, the company is eliminating a percentage of the freshwater stocks and reducing the smolt transfers in 2009.

Previously, it has been communicated that Mainstream Chile would transfer a maximum of 8.7 million Atlantic smolts in 2009, but would adjust lower if the ISA situation did not improve. Given the worsening sanitary situation, Mainstream Chile will now stock a maximum of 6 million Atlantic smolts this year. This figure may again be adjusted lower if we believe the sanitary situation has not improved sufficiently in order to transfer to good biological areas.

At the time of Q3 presentation, Cermaq estimated one off write off costs of NOK 20-40 million in Q4 to adjust the Atlantic stocking plans. Given the increase in ISA and the additional culling of both fresh and seawater stocks, the exceptional write off cost in Q4 is expected to be in the region of NOK 120 million.

Sales volumes The accelerated harvest of Atlantics combined with lower weights has reduced the sales volume in Q4 compared to previous guidance. In addition, sales of Trout, and to a lesser extent Coho, have been delayed into 2009 due to lower market prices prevailing towards the year-end of 2008. In general, major markets like USA and Japan saw reducing demand and market prices during quarter 4 for Chilean and Canadian volumes of all species.

The sales in Q4 versus previous guidance were as follows (in round thousand tonnes RWE):

+----------------------------------+ | | Guiding | Actual | |---------------+---------+--------| | Norway | 11 | 11 | |---------------+---------+--------| | Canada | 9 | 8 | |---------------+---------+--------| | UK | 3 | 2 | |----------------------------------| | | |----------------------------------| | Coho | 5 | 4 | |---------------+---------+--------| | Trout | 3 | 1 | |---------------+---------+--------| | Atlantics | 7 | 5 | |---------------+---------+--------| | Total Chile | 15 | 9 | |----------------------------------| | | |----------------------------------| | Total Q4 2008 | 37 | 30 | +----------------------------------+

Due to the biological conditions for production in Chile, expected sales volumes remain uncertain for 2009. Cermaq does not adjust the specific sales volume guidance for 2009 at present. However, the volumes of Coho and Trout will likely increase from previous stated levels due to the delay in sales from 2008. Atlantics are maintained at the previous guided level, as some sales will be moved from 2008 into 2009 and the main impact of the new ISA cases is on year 2010. Cermaq will regularly update the market on the developments in production conditions and volumes in Chile and other operations during 2009.

Foreign Exchange Rate Impacts Cermaq sells and buys in most of the major currencies given its global portfolio of operations and sales, and has historically been naturally hedged to exchange rate fluctuations on most of its transactions.

However, in Q4, the global financial turbulence has caused unusual and volatile fluctuations in the markets, and had an impact on Cermaq's results. The Norwegian Kroner weakened substantially versus the major currencies such as the US Dollar and Euro during Q4, and this caused a large increase in the group NOK asset and debt base of Cermaq.

In addition, within EWOS, losses in NOK have been incurred on the P&L due to outstanding debt to suppliers valued in foreign currencies such as the Euro, USD and Danish Kroner and also to some customer contracts being priced at exchange rates fixed at the prior quarter's end rate. The volatility in exchange rates coincided with a seasonally high volume period for EWOS. This has negatively impacted on the EWOS gross margin in Q4 by approximately NOK 30 million.

Although the impact of ISA and exchange rate movements on Q4 and the 2008 results is substantial, Cermaq would like to emphasise that it is still above the thresholds for its banking covenants using the standard method of calculation.

Further Information Steven Rafferty, Chief Financial Officer, mobile tel : +47 97 66 41 04

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

Cermaq ASA

http://www.cermaq.com

ISIN: NO0010003882

Stock Identifier: XOSL.CEQ