Bildudalur, Iceland-based salmon-farming firm Icelandic Salmon struggled with biological issues throughout 2024, but the company was able to stabilize conditions and improve its harvest volumes and weights during the year’s closing quarter, according to CEO Bjørn Hembre.
While announcing the firm’s Q4 2024 results, Hembre said the group, which is the sole owner and parent company of farming and processing company Arnarlax and its subsidiaries, worked its way through a challenging period that featured heavy bouts of sea lice, and the results of its mitigation efforts were finally seen in the fourth quarter.
“We have been able to control the sea lice situation and increase the harvesting volumes quite significantly compared to Q3,” he said. “But, we still have quite a way to go before we return to normal harvest volumes. This is likely to be in the second half of this year.”
For Q4 2024, Icelandic Salmon recorded a total harvest of 6,455 metric tons (MT), compared with 7,219 MT harvested in Q4 2023. Though the total harvest was lower year over year, the firm achieved an average harvest weight of 5.2 kilograms gutted weight tonnage (GWT), with a “satisfying superior share of 94 percent,” strong prices, and high demand, Hembre said.
He also noted that the weight was “well above the Norwegian market average” of 3.9 kilograms GWT and that this underscored Icelandic Salmon’s strong market position.
Icelandic Salmon’s operating income for the three-month period was EUR 49.9 million (USD 52.1 million), versus EUR 51.6 million (USD 53.8 million) in Q4 2023, with the year-over-year decline mainly attributed to the lower harvest volume.
Its operational EBIT for the quarter amounted to EUR 1.4 million (USD 1.5 million), down from EUR 2 million (USD 2.1 million) in Q4 2023, with the decline driven by lower volumes and the cost levels on harvested fish being affected by the biological challenges from the 2023-2024 winter, according to the firm.
In line with its previous guidance, the biological challenges faced in 2024 are also expected to impact harvests in the first half of 2025, with Hembre cautioning that the firm expects low volumes in Q1. As a result, the majority of volume is expected in the second half.
Still, for the full-year 2025, the firm is maintaining its volume guidance of 15,000 MT. It also expects to build significant biomass in the sea and fully utilize its maximum allowed biomass (MAB), Hembre said.
Meanwhile, the group is working with authorities to reinstate a license for 10,000 MT MAB of sterile salmon in Ísafjarðardjúp, which was revoked in Q3 2024. This occurred after the Icelandic Food and Veterinary Authority (MAST) didn’t provide a necessary comprehensive, weighted assessment of the potential risk of the spread of fish diseases and parasites before the license was issued, Hembre explained.
Efforts to establish larger sites for improved MAB utilization are also ongoing, with extension of several sites at its Arnarfjörður operations under review.
This process has taken longer than expected, Hembre said, with a final decision not expected before the end of this year.
“We will hopefully have the approval in place by then, but the full utilization of these sites will take a little bit longer,” he said.
An additional 4,500 MT application in Arnarfjörður remains under review by the authorities, he said.
Further complicating future projections, the new Icelandic government has announced intentions to introduce laws focused on the sustainable development of salmon farming. With that in mind, Hembre highlighted the growing importance of the industry to the Icelandic economy, pointing out that salmon represented 6 percent of the total value of goods exported by the country in 2024.
“The new law will be crucial to ensuring the continued sustainable growth of the industry in Iceland,” he said.
To reinforce the group’s financial position in the meantime, it has agreed on an extension to its sustainability-linked financing agreement with DNB and Danske Bank, which should provide additional funding of EUR 65 million (USD 67.8 million) to the firm, increasing the total loan facility to EUR 160 million (USD 167 million).
