Norwegian salmon-farming company Måsøval reported a negative EBIT in Q3 2024 as it dealt with multiple biological challenges.
The company reported group revenues of NOK 530 million (USD 47.9 million, EUR 45.7 million) in Q3 2024, down from NOK 670 million (USD 60.5 million, EUR 57.7 million) posted in the same quarter of 2023. Of that total, its sales revenue from salmon dropped to NOK 492 million (USD 44.4 million, EUR 42.4 million) from NOK 617 million (USD 55.7 million, EUR 53.2 million).
The company posted an EBIT loss of NOK 138.6 million (USD 12.5 million, EUR 11. 9 million) in Q3 2024, down from a positive EBIT of NOK 136 million (USD 12.3 million, EUR 11.7 million). Its operational EBIT dropped to a loss of NOK 60 million (USD 5.4 million, EUR 5.2 million), down from an operational EBIT gain of NOK 113 million (USD 10.2 million, EUR 9.7 million).
"Q3 was a challenging quarter for Måsøval. Higher sea temperatures than seasonally normal in our region resulted in high sea lice pressure, which hampered growth and elevated our delousing costs. Moreover, we experienced ISA on two sites in the quarter,” Måsøval CEO Helge Kvalvik said. “Harvesting salmon with low weight resulted in high cost and low prices.”
Måsøval discovered infectious salmon anemia (ISA) at its salmon-farming sites Espnestaren and Måøydraga, which forced the company to undertake an accelerated harvest schedule of fish at low average weights, generating low prices and high harvest costs. Harvested volumes across the company increased slightly to 7,095 metric tons (MT), up from 7,037 MT, in part due to the ISA harvests.
“All fish infected with ISA was sold during Q3, and strong measures have been taken to mitigate the risk of ISA spreading to more sites,” the company said.
Måsøval also had to deal with elevated sea lice pressure at its Farming Mid region, which resulted in high delousing costs, lost feeding days, and mortalities, the company said.
The increased costs surpassed the company’s sales revenue and pushed its EBIT per kilogram negative. The company’s EBIT per kilogram was a loss of NOK 1.40 (USD 0.13, EUR 0.12) in Q3 2024, down from a positive EBIT per kilogram of NOK 20.50 (USD 1.85, EUR 1.76) in Q3 2023.
Kvalvik pointed out that the poor results were largely attributable to its Farming Mid segment, while Farming West saw improvements.
“Although it was a challenging quarter, it's important to highlight the continuing positive trend in Region West, with improved biological performance yielding lower costs, higher superior shares, and increased harvest weights,” he said.
Farming West posted an operational EBIT of NOK 9.6 million (USD 867,000 EUR 827,000) and, according to the company, achieved higher average weights and higher shares of superior-grade salmon compared to Farming Mid.
The company faced other challenges aside from biological difficulties with its salmon. The delivery of a new feed barge for its Hårkallbåen site was halted after it grounded upon delivery while being towed by an external tugboat company.
Måsøval said the incident is still under investigation by police, and its insurance should cover the cost to replace it with a similar new build. In the meantime, the company said it has entered into a rental agreement with an alternative feed barge to avoid any impacts to its sea production.
However, the Stad municipality is pushing the company to remove the wreck of the feed barge – which it said is located in a “very harsh and dangerous part of coastline.”
“An operation to remove the wreck cannot be carried out during autumn or winter without severe risk to people, property, and the environment,” the company said. “The plan is to remove the wreck during summertime. The barge was also insured with a protection and indemnity insurance to cover expenses related to liabilities related to removal of the wreck.”
Looking forward, the company said it is in the process of obtaining necessary licenses and performing screening to increase smolt production and is undergoing a feasibility study on a recirculating aquaculture system (RAS) smolt facility. The company has also secured additional harvesting capacity and created a fully integrated sales department.
The company added that market fundamentals for the company are “still strong” and that it is maintaining its harvest guidance of 24,600 MT to 25,700 MT for FY 2024.
