Bakkafrost’s first-quarter profits slip, harvest increases

Published on
May 6, 2019

Faroese Atlantic salmon producer Bakkafrost Group delivered total operating earnings before interest and taxes (EBIT) of DKK 267.7 million (USD 40.1 million, EUR 35.9 million) in the first-quarter of 2019, down slightly from the DKK 268.2 million (USD 40.2 million, EUR 36 million) that it posted for the corresponding period of last year. 

Group profit for the three-month period was DKK 212.8 million (USD 31.9 million, EUR 28.5 million), down from DKK 272.3 million (USD 40.8 million, EUR 36.5 million) in Q1 2018, while revenues climbed by more than DKK 112 million (USD 16.8 million, EUR 15 million) to DKK 963.7 million (USD 144.4 million, EUR 129.1 million).

The company’s salmon harvest in the quarter increased 12 percent year-on-year to 13,707 metric tons (MT) gutted weight. Its Farming segment achieved an operational EBIT of DKK 229.7 million (USD 34.4 million, EUR 30.8 million), up from DKK 228.4 million (USD 34.2 million, EUR 30.6 million) in Q1 2018, which corresponded to a lower DKK 16.76 (USD 2.51, EUR 2.24) per kilogram. 

Its Value Added Products (VAP) segment achieved an EBIT of DKK 1.3 million (USD 194,739, EUR 174,115) in the last quarter, compared to a loss of DKK 11.6 million (USD 1.7 million, EUR 1.6 million) in Q1 2018. VAP production was up 122 percent year-on-year to 4,689 MT.

However, the performance of its FOF (fishmeal, oil and feed) segment declined with operational earnings before interest, taxes, depreciation and amortization (EBITDA) of DKK 62.5 million (USD 9.4 million, EUR 8.4 million), down 25 percent on the corresponding period of last year. 

“The disrupted market balance from Q4 2018 into Q1 2019 resulted in a weaker than expected result in the farming segment in the first part of Q1 2019. We are pleased, however, to experience a better market development and more activity in the VAP segment,” Regin Jacobsen, CEO of Bakkafrost, said. 

The company expects to harvest 54,500 MT of gutted weight salmon in 2019. It also expects to release 13.5 million smolts, compared with 12.5 million smolts in 2018 and 9.9 million smolts in 2017. 

Depending on external sales, it also anticipates selling 85,000 MT of fish feed this year.

It highlighted that the average salmon spot price increased by around NOK 2.40 (USD 0.27, EUR 0.24) per kilogram in Q1 2019, compared with Q1 2018. 

Bakkafrost operates in the European, U.S., Far East Asia, and Russian salmon markets.   

Contributing Editor reporting from London, UK

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