Falling farmed salmon prices dent SalMar’s profits

Published on
August 26, 2015

SalMar Group reported a decline in its profits for the second quarter of 2015, citing a sharp drop in Atlantic salmon prices during the period for its “mixed” performance.

The Norwegian company generated gross operating revenues of NOK 1.8 billion (EUR 191.5 million/USD 220 million) in Q2 2015, up marginally from the corresponding period of last year. However, its operational earnings before interest and taxes (EBIT) totaled NOK 335.1 million (EUR 35.6 million/USD 40.9 million), down from NOK 447.4 million (EUR 47.6 million/USD 54.7 million) in Q2 2014. Its operational EBIT in Q1 2015 totaled NOK 360.8 million (EUR 38.4 million/USD 44.1 million).

SalMar made a net profit of NOK 187.6 million (EUR 19.9 million; USD 22.8 million) in Q2 2015, compared with NOK 234.4 million (EUR 24.9 million; USD 28.5 million) a year previously. For the first half of this year, its net profit totaled NOK 405.8 million (EUR 43.1 million; USD 49.4 million), compared with NOK 471.3 million (EUR 50 million; USD 57.3 million) in H1 2014.

The company’s Q2 2015 harvest totaled 34,800 metric tons (MT), compared with 35,100 MT in the same period of 2014.
A further 6,600 MT of salmon was harvested by Norskott Havbruk (Scottish Sea Farms), the same as in Q2 2014. SalMar owns 50 percent of Norskott Havbruk.

The average price of Atlantic salmon at the end of the last quarter was NOK 38 (EUR 4.04/USD 4.64) per kg, NOK 3.12 (EUR 0.33/USD 0.38) per kg less than in the previous quarter. For the SalMar group as a whole, the operational EBIT amounted to NOK 9.62 (EUR 1.02/USD 1.18) per kg in the period.

“The second quarter was mixed for the SalMar Group," said CEO Leif Inge Nordhammer. "Our results remain affected by the inconsistent performance of our fish farming segments, while the Sales and Processing segment posted satisfactory results. We continue to face a difficult biological situation, particularly in the Rauma and Central Norway segments. Sales and processing activities continued to perform well, and is overall providing satisfactory results in the quarter.”

For 2015 as a whole, SalMar expects to harvest around 139,000 MT of salmon in Norway, while Norskott Havbruk is expected to harvest around 31,000 MT.

Based on estimates of the standing biomass at the close of the quarter, SalMar said the global supply of Atlantic salmon is expected to increase by around 4 percent this year with Norway's output forecast to rise by 5 percent to just under 1.26 million MT.

Contributing Editor reporting from London, UK

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