Bakkafrost ‘very satisfied’ with 4Q results

Bakkafrost turned in a “very satisfying” fourth quarter despite challenging market conditions marked by low salmon prices.

On Tuesday, the Faroe Islands salmon farmer reported operating revenues of DKK 397.2 million in the fourth quarter of 2011, up from DKK 252.5 million in the corresponding period of 2010. For all of 2011, the company’s operating revenue amounted to DKK 1.32 billion, up from DKK 820.2 million in 2010.

The company’s operating earnings (before interest and taxes), however, slipped to DKK 46 million in the fourth quarter of 2011 from DKK 90.4 million in the same period in 2010. For all of 2011, operating earnings totaled DKK 335.1 million.

As for production, Bakkafrost nearly doubled its oputput in the fourth quarter of 2011 to 11,538 metric tons (gutted weight) of salmon. Last year, the company’s harvest, including Viking and Faroe Farming in the first half of 2011, totaled 36,343 metric tons. This year, Bakkafrost expects to churn out between 48,000 to 50,000 metric tons of salmon.

“We are very satisfied with the result for 2011,” said Bakkafrost CEO Regin Jacobsen. “This is the best result for Bakkafrost ever, and the biological performance during the year was good and the market for salmon strong. We are optimistic for 2012, as our volumes will increase further, but prices will be lower than in 2011 on average.”

Looking ahead, the company said it appears that salmon prices have stabilized in the range of NOK 23 to 25 per kilogram. “As a low-cost producer, a salmon price in the upper end of this range is sufficient for Bakkafrost.,” said the company. “The reduction in the salmon price will have a positive impact on volumes sold when the decreased prices reaches the end users.”


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