Nordic Halibut, a halibut-farming company based in Norway, said in a Q2 2024 operational update that it continued to see strong pricing for its latest harvests, even though those prices dropped year over year.
The company said it experienced a planned decline in harvest weights as part of its strategy to distribute weights in response to market signals. The company had an average harvest weight in Q2 2024 of 4.5 kilograms (4.1 kilograms head-on gutted) compared to an average of 5.2 kilograms (4.7 kilograms head-on gutted) in Q2 2023.
The lower harvest weight resulted in a lower average sales prices of NOK 153 (USD 14.24, EUR 13.03) per kilogram, down 1.2 percent from Q2 2023 and down from the NOK 163 (USD 15.17, EUR 13.88) the company received per kilogram in Q1 2024.
Harvest volumes in the quarter reached 140 metric tons (MT), with total revenue in Q2 2024 reaching NOK 19.1 million (USD 1.7 million, EUR 1.6 million) – down from the 151 MT harvested and NOK 21 million (USD 1.9 million, EUR 1.8 million) brought in in Q2 2023.
The company said it plans to continue following its strategy of optimizing harvest weights in response to market signals, despite the drops in revenue.
“The overarching objective remains to optimize the utilization of available biomass, reaffirming our commitment to long-term goals, even if it entails potential impacts on short-term harvest volumes,” the company said.
Overall, though, the company, in its FY2023 results, said that it has refined its commercial strategy to focus on price premiums for larger-sized farmed halibut. That strategy has resulted in lower harvests for multiple quarters, but the company said customers have shown willingness to pay premium prices for larger halibut.
“The primary focus of Nordic Halibut's revised strategy is to leverage market preferences and price dynamics associated with larger-sized fish,” the company said. “This involves prioritizing biomass build-up with an optimal size distribution and concentrating on producing larger-sized halibut to achieve target production volumes.”
The company said it saw an increase in price in 2023 compared to previous years, and at one point, the sales price reached an average of NOK 161 (USD 15.00, EUR 13.71) per kilogram. More importantly, the company said halibut it sold that reached above 7 kilograms fetched a price of NOK 194 (USD 18.07, EUR 16.52) per kilogram, “highlighting the importance of larger-sized fish and the adjusted commercial focus based on market signals.”
The company said in its Q2 2024 update that it expects to have higher harvest volumes with higher average weights in the second half of the year, capitalizing on that price differential.
In both its Q1 2024 update and its FY2023 update, Nordic said it is on track to reach its long-term production target of 4,500 MT of head-on-gutted halibut in 2026 and 10,350 MT by 2031. It said with the development of a new grow-out site in the second half of 2023, it has achieved a fully integrated value chain that has all the capacity it needs to meet its 2026 target.
It added that the NOK 206 million (USD 19.2 million, EUR 17.5 million) raised through a private placement and subsequent offering also enhanced its financial capacity to execute its growth plan.
