Norwegian cod-farming company Norcod posted a 229 percent increase in revenue in Q3 2024, but its operating losses also widened in part due to a marine heat wave that killed off fish.
Norcod reported NOK 69 million (USD 6.2 million, EUR 5.8 million) in revenue in Q3 2024, up from NOK 21 million (USD 1.8 million, EUR 1.7 million) in Q3 2023. That revenue came as the company sold 1,348 metric tons (MT) of farmed cod in the quarter, up from 146 MT sold in Q3 2023.
The company’s revenue increases were contrasted by a similar increase in operating losses. Norcod reported an operating loss of NOK 73 million (USD 6.5 million, EUR 6.2 million) in the quarter, up from the NOK 40 million (USD 3.5 million, EUR 3.4 million) loss it posted in Q3 2023. That total is also up from the NOK 47 million (USD 4.2 million, EUR 4 million) operating loss that it posted in Q2 2024.
Those losses were in part thanks to a marine heat wave and unusually high temperatures.
“Extraordinary mortality related to these factors is quantified at NOK 23 million [USD 2 million, EUR 1.9 million] as a non-recurring item,” Norcod said.
The company said the higher temperatures pushed up costs and also caused complications in biomass growth for its farmed cod.
“This was challenging for Norcod and other fish farmers, with reduced feeding and consequently limited growth, as well as increased mortality,” the company said. “The situation led to a change in harvesting plans to ensure fish welfare, which in turn resulted in lower harvesting weight.”
Partially as a result of the mortality, the production cost at sea increased to NOK 56 per kilogram (USD 5.02, EUR 4.77), the highest costs the company has faced in 2024. The company’s biomass at sea also remained flat at 7,083 MT, up just 3 MT from the 7,080 MT it had at sea as of Q2 2024.
Norcod said that while its operational environment in the quarter was challenging, its market outlook has been positive. The company said that there have been positive developments in the sales price of its product, with a 20 percent increase in prices from Q1 to Q3 2024. It said it has also had strong market conditions and that 80 percent of volumes it sold in Q3 2024 were contracted.
The company said that there is growing awareness of the benefits of farmed cod – such as a consistent supply of fresh product year-round. That, coupled with a steep drop in cod quotas has reduced available raw material, further benefiting Norcod.
“The market conditions and fundamentals for farmed cod have never been better, supporting a positive outlook for farmed cod and Norcod,” it said.
The company added that it expects its production to normalize after the difficult quarter.
“Although production costs were extraordinarily high in Q3 2024 due to unusually high sea temperatures, the company expects production costs to normalize at significantly lower levels in the upcoming quarters, in line with the quarters preceding Q3 2024,” Norcod said.
The company said it will see top-line improvements in the coming quarters and improved financial results in Q4 2024, with the potential for reaching positive cash flow from operations in Q1 2025.
