Operating profit soars at SalMar


SeafoodSource staff

Published on
August 16, 2010

The SalMar Group announced its results for the second quarter of 2010, including a 70 percent increase in operating profit to NOK 173.4 million (USD 28.2 million; EUR 21.9 million). In addition, all of SalMar’s divisions, including Central Norway, Northern Norway and Scotland, achieved record high margins during the quarter.

One of the world’s largest farmed salmon producers credited the increase in profits to a combination of high salmon prices and continued satisfactory biological developments.

Operating revenues also increased to NOK 659.5 million, up from NOK 456.3 million during the same period last year. SalMar also posted an operating profit before fair value adjustment of the biomass of NOK 173.4 million, compared with NOK 102.2 million during 2009.

“Every segment delivered the highest operating profit per kilogram gutted weight they have ever achieved. The record high price of salmon during the quarter is a strong part of the reason for the record margins, but our uncompromising focus on the biomass and operational efficiency is a precondition for achieving the results that we have delivered,” said SalMar CEO Leif Inge Nordhammer. “It is particularly pleasing to see that SalMar Northern Norway has delivered another strong quarter, and has gained a biological platform which bodes very well for the second half of the year. The relatively low sea temperatures we have seen in Norway so far this year have not given us optimal feeding and growth conditions, and this has had a negative effect on production costs.

“The salmon market is still very strong, and so far in 2010 both salmon prices and export volumes have been at record levels for the time of year,” Nordhammer continued. “The global supply of salmon is expected to fall by around 5 percent in 2010. Combined with a continued strong demand in our most important markets, this should result in salmon prices stabilizing at a relatively high level for a long time to come.”

Despite the low sea temperatures in parts of Norway this year, SalMar is maintaining its 2010 harvesting estimate of 85,000 metric tons gutted weight. And despite historically high prices, the company said demand is strong.

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