Record salmon prices aid Bakkafrost’s best ever results but volumes decline

Bakkafrost Group delivered total operational earnings before interest and taxes (EBIT) of DKK 349.6 million (USD 49.8 million, EUR 47 million) in the fourth-quarter of 2016, up from DKK 257 million (USD 36.6 million, EUR 34.6 million) in the corresponding period of the previous year.

For the full year 2016, the Faroe Islands-based Atlantic salmon farmer achieved an operational EBIT of DKK 1.2 billion (USD 171 million, EUR 161.4 million), up from DKK 1 billion (USD 142.5 million, EUR 134.5 million).

Thanks to high salmon spot prices, which averaged NOK 68.30 (USD 8.18, EUR 7.72) per kg in Q4 2016, up 51 percent year-on-year, the company’s Farming segment achieved an operational EBIT of DKK 401.6 million (USD 57.2 million, EUR 54 million) in Q4 2016, which corresponded to NOK 37.70 (USD 4.51, EUR 4.26) per kg. 

But while the Value Added Products (VAP) segment realized higher prices, the increase did not match the increase in the spot prices, so it had negative margins with an operational EBIT of DKK -60.8 million (USD -8.7 million, EUR -8.2 million).

At the same time, its fishmeal, oil and feed (FOF) segment delivered earnings before interest, taxes, depreciation and amortization (EBITDA) of DKK 71.1 million (USD 10.1 million, EUR 9.6 million).

“The good development on the market had a positive influence on Bakkafrost’s result in 2016, although the harvested volumes decreased in 2016, compared to 2015. Bakkafrost delivered a record high result for 2016. The Farming and FOF segments had very good results, while the VAP segment had difficult circumstances in 2016. In 2016, the harvest operation started in the new harvest/VAP factory at Glyvrar, and we expect to see operational savings, when the VAP processing at the same factory will be up and running,” said Regin Jacobsen, CEO of Bakkafrost.

In total, Bakkafrost harvested 12,940 metric tons (MT) of fish (gutted weight) in the last quarter, down from 13,675 MT in Q4 2015. For the full year 2016, the company harvested 47,542 MT of salmon (gutted weight) in 2016, down from 50,565 MT in 2015. 

It expects to harvest 55,500 MT gutted weight in 2017. This is 500 MT less than the previous forecast and relates to a precautionary harvest of 190,000 salmon at farming site A-73 Hvannasund Nordur in January due to the fish being was under suspicion of having pathogenic infectious salmon anaemia (ISA).

To date, ISA has not been confirmed and the farming site remains under increased surveillance.


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