"Satisfactory" second-quarter brings increased volumes, earnings for Bakkafrost

Published on
August 24, 2021
Bakkafrost Group has reported total operating earnings before interest and taxes (EBIT) of DKK 407.5 million (USD 64.3 million, EUR 54.8 million) for the second quarter of 2021.

Bakkafrost Group has reported total operating earnings before interest and taxes (EBIT) of DKK 407.5 million (USD 64.3 million, EUR 54.8 million) for the second quarter of 2021, up from DKK 181.9 million (USD 28.7 million, EUR 24.5 million) in the corresponding period of 2020.

The Faroe Islands-based Atlantic salmon farming group’s operating revenues increased to more than DKK 1.6 billion (USD 252.4 million, EUR 215.1 million) for the last quarter, and to almost DKK 2.8 billion (USD 441.8 million, EUR 376.5 million) for the first half of the year. Its Q2 profit decreased from last year’s DKK 471.7 million (USD 74.5 million, EUR 63.4 million) to DKK 428.1 million (USD 74.4 million, EUR 63.4 million), while its profit for H1 2021 was up by more than DKK 512 million (USD 80.8 million, EUR 68.8 million) to DKK 835.9 million (USD 131.9 million, EUR 112.4 million).

Bakkafrost said it had harvested 28,196 metric tons (MT) gutted weight of fish in the last quarter, with the Faroes accounting for 17,561 MT, and Scotland 10,364 MT. Its total harvested volume for the first half of this year was 49,223 MT, with the Faroes and Scotland supplying 31,586 MT and 17,637 MT, respectively. Bakkafrost’s expected harvest volume for 2021 in the Faroe Islands is 66,000 MT, while the expected harvest in Scotland is 40,000 MT. As such, its total 2021 harvest volume is expected to be 106,000 MT gutted weight, compared with the 85,686 MT harvested in 2020. 

Delivering the results, Bakkafrost CEO Regin Jacobsen said the group was “satisfied” with the last quarter’s results, saying the salmon market had remained “quite strong” despite being somewhat hampered by the COVID-19 pandemic.

The U.S. market had been especially strong in the period, taking increasing volumes of salmon, he said.

“The global harvest was only 1 percent up, compared to the same quarter last year. However, inventories have been released resulting in an increase in global supply of nearly 9 percent, compared to the second quarter last year,” Jacobsen said. “Looking ahead, the salmon market outlook is tight for the rest of 2021 as well as for H1 2022.”

Jacobsen said the group is also pleased with the progress made in its Faroese hatcheries, which released 3.2 million smolt with an average size of 422 grams in Q2.

“Hence, we are closing in on our 500-gram target in our large-smolt strategy. We are very excited about this development and that our ongoing expansions of hatcheries in the Faroe Islands and in Scotland is progressing well. Especially in Scotland, having larger smolts is a key enabler for improving the performance of the farming operation. This is therefore also an important investment area for us, which not only benefits our operation, but also the suppliers in local communities where we operate,” Jacobsen said.

In the first half of this year, Bakkafrost’s sourcing from local suppliers amounted to DKK 876 million (USD 138.2 million, EUR 117.8 million) in the Faroe Islands and DKK 500 million (USD 78.9 million, EUR 67.2 million) in Scotland.

The group’s Faroe Islands farming segment (FO) made an operational EBIT of DKK 343.2 million (USD 54.2 million, EUR 46.1 million) in the last quarter, up from DKK 85.8 million (USD 13.5 million, EUR 11.5 million), with the larger harvest achieving higher prices. For H1 2021, FO’s operational EBIT was DKK 486.5 million (USD 76.8 million, EUR 65.4 million), up from DKK 288.7 million (USD 45.6 million, EUR 38.8 million) less than a year previously.

Bakkafrost’s Scottish farming segment, which consists of the operating business of the Scottish Salmon, made an operational EBIT of DKK 52.9 million (USD 8.3 million, EUR 7.1 million) in Q2 2021, and DKK 46.6 million (USD 7.4 million, EUR 6.2 million) in H1 2021.

Also in the last quarter, Bakkafrost’s VAP segment made an operational EBIT of DKK 5.3 million (USD 836,330, EUR 712,658), down from DKK 48.6 million (USD 7.7 million, EUR 6.5 million) in Q2 2020. For H1 2021, the operational EBIT was DKK 80.3 million (USD 12.7 million, EUR 10.8 million), improving on last year’s DKK 37.8 million (USD 6 million, EUR 5.1 million). 

And the group’s Fishmeal, Oil and Feed (FOF) segment delivered higher earnings before interest, taxes, depreciation, and amortization (EBITDA) of DKK 57.4 million (USD 9.1 million, EUR 7.7 million) in the last quarter, with its sales of fishmeal climbing to 27,272 MT, of which the FO segment internally used 26,416 MT. Overall, Bakkafrost anticipates a decrease in production volumes of fishmeal and fish oil in 2021, compared to 2020, while subsidiary Havsbrún’s sales of fish feed for 2021 is expected to be 120,000 MT, depending on external sales.

Photo courtesy of Bakkafrost

Contributing Editor reporting from London, UK

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