"Strong biological situation" raises SalMar’s Q3 earnings, harvest

Published on
November 12, 2018

Lower costs, good prices, and a larger harvest saw SalMar deliver total operational earnings before interest and taxes (EBIT) of NOK 939.1 million (USD 110.8 million, EUR 98.5 million) in the third quarter of this year, up from NOK 801.3 million (USD 94.6 million, EUR 84 million) in Q3 2017. 

The Norwegian-headquartered salmon farmer generated gross operating revenues of NOK 2.8 billion (USD 330.5 million, EUR 293.7 million) in the last quarter, an improvement on Q3 2017’s NOK 2.7 billion (USD 318.7 million, EUR 283.2 million). 

For the group as a whole, this gave an EBIT per kg of NOK 26.03 (USD 3.07, EUR 2.73), compared with NOK 23.60 (USD 2.79, EUR 2.47) a year previously. This increase was despite the average price of NOK 54.80 (USD 6.47, EUR 5.75) being NOK 1.75 (USD 0.21, EUR 0.18) lower than Q3 2017.

It harvested 36,100 metric tons (MT) of salmon, up from 34,000 MT.

"Efficient operations and a strong biological performance have helped SalMar deliver a strong financial result. This achievement has been made possible by the dedication and hard work of our employees, whose efforts have contributed to lower costs, good price achievement and increased efficiency in our harvesting and processing plants," SalMar CEO Olav-Andreas Ervik said.

Regionally, Fish Farming Central Norway harvested a total of 32,900 MT of salmon in the last quarter, compared with 23,200 MT in the corresponding period of last year. The larger harvest helped generate gross operating revenues of NOK 1.9 billion (USD 224.3 million, EUR 199.2 million) in the period, up from less than NOK 1.4 billion (USD 165.2 million, EUR 146.8 million) in Q3 2017. 

Fish Farming Northern Norway harvested 3,200 MT of salmon, which was 7,600 MT less than in the corresponding quarter of last year. This reduced harvest had been planned to optimize its new maximum allowed biomass capacity. As such, the segment generated gross operating revenues of NOK 175 million (USD 20.7 million, EUR 18.3 million) in the quarter, down from NOK 623.1 million (USD 73.5 million, EUR 65.3 million) in Q3 2017. 

Meanwhile, SalMar’s sales and processing segment generated slightly higher revenues of NOK 2.8 billion (USD 330.5 million, EUR 293.6 million) in the quarter. Its operational EBIT of NOK 73.1 million (USD 8.6 million, EUR 7.7 million) in the last quarter corresponded to a margin of 2.6 percent.

The improvement was attributed in part to the precontracted sale of around 42 percent of the harvested volume at prices above the average spot price.

A record-high harvested volume also boosted operating efficiency in both the harvesting and processing plants. In all, around 44,400 MT of fish were harvested at InnovaMar during the quarter, compared with 30,600 MT in Q3 2017. Around 17,000 MT of the total volume came from external sources. 

SalMar expects to harvest a total 143,000 MT of salmon in Norway in 2018, increasing to 145,000 MT in 2019.

Also for 2018, Norskott Havbruk (Scottish Seafarms) is expected to harvest 26,000 MT, while Arnarlax is expected to harvest a total 6,100 MT.

Photo courtesy of SalMar

Contributing Editor reporting from London, UK

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