‘Satisfactory’ Q2 for Bakkafrost, more focus on biological risks after ISA scare

Bakkafrost Group delivered total operational earnings before interest and taxes (EBIT) of DKK 307.1 million (USD 46.7 million, EUR 41.3 million) in the second-quarter of this year, a slight increase compared with Q2 2015. But despite higher spot prices, its operating revenues in the last quarter fell to DKK 789.7 million (USD 120.2 million, EUR 106.1 million), which it has attributed to lower harvested volumes and less fishmeal sales.

In total, the Faroe Islands-based Atlantic salmon farmer harvested 13,004 metric tons (MT) gutted weight of fish in the last quarter, down 8 percent from 14,182 MT in Q2 2015.

Its farming segment delivered an operational EBIT of DKK 357.9 million (USD 54.5 million, EUR 48.1 million), while its value-added processing (VAP) segment, which produced 4,664 MT of products, posted an operational EBIT of DKK -68.4 million (USD -10.4 million, EUR -9.2 million).

The fishmeal, oil and feed (FOF) segment delivered earnings before interest, taxes, depreciation and amortization (EBITDA) of DKK 45.4 million (USD 6.9 million, EUR 6.1 million), with its sales of fishmeal reaching 16.295 MT.

“We are very satisfied with the result for Q2 2016. The salmon spot price has been [a] record high in the quarter and the biological performance has been good. The VAP segment has struggled, but we maintain our strategy to sell a share of our production as value-added products. The development in our fishmeal, fish oil and fish feed segment in the quarter was also good,” said Regin Jacobsen, CEO of Bakkafrost.

Bakkafrost released 1.9 million smolts in Q2 2016, which is in line with its smolt release plan. It expects the global supply of farmed Atlantic salmon to decrease 4 percent in 2016, with the decline in the second-half of the year to be down 8-9 percent year-on-year.

Overall, the company expects to harvest 49,000 MT gutted weight in 2016. Its forecast for smolt release in 2016 is 10.4 million.

Last month, Bakkafrost announced the suspicion of the pathogenic Infectious Salmon Anaemia (ISA) virus at a one of its salmon farming sites following a regular test by the Veterinary Authority. Although subsequent testing did not prove the presence of the virus, the company said the process drew attention to the importance of good animal welfare and biology to reduce biological risks, and also that such biological situations are its most important risk area.

“Bakkafrost is focusing on the biological risk continuously and has made several new investments and procedures to diminish this risk,” it said.


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