Norwegian salmon-farming company Masoval posted higher sales revenue and earnings in Q2 2024 despite lower harvests, in part thanks to securing higher average prices year over year amid high volatility.
The salmon farmer recorded revenue of NOK 934 million (USD 89.3 million, EUR 79.8 million) in Q2 2024, up from the NOK 804 million (USD 76.8 million, EUR 68.7 million) it posted in Q2 2023. That increase came even as its harvests dropped from 7,573 metric tons (MT) to 6,673 MT.
The company’s operational EBIT also increased to NOK 298 million (USD 28.5 million, EUR 25.5 million) in Q2 2024, up from NOK 210 million (USD 20.1 million, EUR 17.9 million) in Q2 2023. Profit before tax dropped slightly to NOK 175 million (USD 16.7 million, EUR 14.9 million) in the quarter, down from NOK 196 million (USD 18.7 million, EUR 16.8 million); however, its net profit after tax jumped to NOK 99 million (USD 9.5 million, EUR 8.5 million) – a significant improvement from the loss of NOK 78 million (USD 7.5 million, EUR 6.7 million) it posted in Q2 2023.
Masoval CEO Helge Kvalvik said the performance came amid a challenging price environment for salmon.
“Salmon prices were a real roller coaster this quarter with large volatility,” Kvalvik said. “Our harvesting profile was somewhat tilted toward the end of the quarter, when prices were low. All in all, we nonetheless realize prices that was NOK 8 [USD 0.76, EUR 0.68] higher than the same quarter last year.”
Alongside increased prices, Masoval’s farming segment also posted better operational performance, Kvalvik said. Realized cost for its salmon in Q2 2024 was NOK 51 (USD 4.87, EUR 4.35) per kilogram, compared to NOK 63 (USD 6.02, EUR 5.38) per kilogram in Q2 2023.
“I am proud to see region west delivering improvements and a record strong margin,” Kvalvik said. “The value creation in the quarter demonstrates the powerful interaction between dedicated employes and high performing sites.”
According to Masoval’s results, its farming segment posted total operating revenues in Q2 2024 of NOK 698 million (USD 66.7 million, EUR 59.6 million), down from NOK 736 million (USD 70.3 million, EUR 62.9 million) in Q2 2023. However, the segment’s operational EBIT increased to NOK 332 million (USD 31.7 million, EUR 28.4 million), up from NOK 219 million (USD 20.9 million, EUR 18.7 million).
Year-to-date, the company’s farming segment has achieved NOK 1.06 billion (USD 101.3 million, EUR 90.6 million) in revenue, up from NOK 926 million (USD 88.5 million, EUR 79.2 million) in the same period of 2023, and an operational EBIT of NOK 496 million (USD 47.4 million, EUR 42.4 million) – up from NOK 272 million (USD 26 million, EUR 23.2 million).
“I am very satisfied with the operational performance in the farming segment this quarter,” Kvalvik said. “The segment achieved strong margins driven by a combination of lower costs and higher prices.”
The company’s sales and processing segment did not perform as well as farming, and its operational EBIT was a loss of NOK 8 million (USD 764,000, EUR 683,000) on NOK 925 million (USD 88.4 million, EUR 79.1 million) in revenue. According to Masoval, the lower earnings and higher revenue was in part due to significant price declines in a period of high harvesting, alongside harvesting of fish affected by ISA and pancreas disease (PD).
Masoval said it is working to develop a new harvesting facility it acquired from Mowi in January and is planning to start up the new facility in Q3 2024 to increase its harvest capacity.
In its results, Masoval also said it expects a verdict shortly on a lawsuit it filed against the Norwegian government. Masoval announced the lawsuit in May 2023, seeking compensation related to the false diagnosis of pancreas disease in its salmon by state officials who forced it to cull its fish.
The company won NOK 12.8 million (then USD 1.2 million, EUR 1.1 million) in compensation, but the state appealed the verdict and the case went before the court of appeals in June.
Masoval also mentioned the progress on its efforts to deal with its discovery that its subsidiary Pure Norwegian Salmon (PNS) had been selling frozen salmon deemed unsuitable for human consumption. The board discovered the incident in February 2024 and referred the information to the authorities.
“Whether this case will result in sanctions and what potential sanctions might be is uncertain at this time,” Masoval said. "However, similar cases have led to sanctions, such as fines and forfeiture of profits from previous years, of a magnitude that is significant for a company of PNS’s size but not of a magnitude that is significant for the group’s finances.”
Masoval said it is in the process of developing its own fully owned and controlled sales department and has entered into a letter of intent with PNS to acquire its sales department.
“The intent is to retain a skilled and knowledgeable sales department, with control over the entire value chain,” the company said.
