Norway Royal Salmon expects strong salmon market to last through 2022

Published on
February 23, 2022
NRS Interim CEO Klaus Hatlebrekke said demand for salmon increased in the final quarter of 2021 and into the first quarter of 2022.

Trondheim, Norway-headquartered Norway Royal Salmon (NRS) has reported operational earnings before interest and taxes (EBIT) of NOK 102 million (USD 11.5 million, EUR 10.2 million) and earnings before interest and taxes (EBIT) per kilogram of NOK 9.43 (USD 1.07, EUR 0.94) for the fourth quarter of 2022. Both figures were up year-over year, with 2020’s Q4 EBIT at NOK 17 million (USD 1.9 million, EUR 1.7 million) and its EBIT per kilo at NOK 5.05 (USD 0.57, EUR 0.50).

The results are a slight update from NRS’ preliminary Q4 figures, released 17 February, 2022.

NRS Interim CEO Klaus Hatlebrekke said demand for salmon increased in the final quarter of 2021 and into the first quarter of 2022.

“With a very strong demand and expectations of a decline in global harvest volumes in the first half of 2022, this provides the basis for a very positive market view for salmon in the future,” he said.

At the same time, Hatlebrekke said increased production from NRS’s smolt facility and the phasing out of triploid fish over the next few years are expected to lead to a decrease in production costs for NRS.

“We are pleased that the production at our new smolt facility in Dåfjord has been good, which will ensure NRS smolt from the second quarter,” he said.

For the full financial year 2021, the group achieved operating revenues of NOK 5.8 billion (USD 655.8 million, EUR 577.8 million), an increase of 23 percent on the previous year. Its operational EBIT increased 40 percent to NOK 344 million (USD 38.9 million, EUR 34.3 million), while its profit after tax was NOK 693 million (USD 78.4 million, EUR 69 million).

NRS harvested 13,257 metric tons (MT) of gutted-weight salmon in the quarter, which was 85 percent more than in Q4 2020.

Its Farming Norway segment harvested 10,319 MT gutted-weight salmon in the period, an increase of 44 percent year-on-year. It also posted an operational EBIT of NOK 95.4 million (USD 10.8 million, EUR 9.5 million), compared with NOK 36.1 million (USD 4.1 million, EUR 3.6 million) in Q4 2020. Operational EBIT-per-kilogram gutted-weight was NOK 9.25 (USD 1.05, EUR 0.92).

Farming Iceland posted an operational EBIT of NOK 29.5 million (USD 3.3 million, EUR 2.9 million) in the quarter, compared with a loss of NOK 13.8 million (USD 1.6 million, EUR 1.4 million) in Q4 2020. The segment’s operational EBIT per kilo gutted-weight was NOK 10.05 (USD 1.14, EUR 1.00) compared with a loss of NOK 4.62 (USD 0.52, EUR 0.46) in Q4 2020. It harvested 2,938 MT gutted weight in the quarter, which was approximately the same as in Q4 2020.

“In the first quarter of 2022, Arctic Fish experienced biological challenges at two sites,” Hatlebrekke said, referencing the die-off of between 1,500 and 2,000 MT of market-ready fish in early February. “Our skilled employees have made a great effort to handle the situation in the best possible way. The situation is now considered to be stable.”

For the full-year 2021, NRS’s harvest volume was 49,640 MT gutted-weight, and for 2022 the harvest volume is estimated at 45,100 MT, with 35,000 MT coming from its Norwegian operations and 10,100 MT from Iceland. For 2023, the group’s total harvest volume is expected to be 63,000 MT, of which 50,000 MT will be Norwegian, and 13,000 MT will be from Iceland.

In 2021, it released 10.7 million smolts, with 8 million in Norway and 2.7 million in Iceland. For 2022, NRS expects to release approximately 16.6 million smolt, of which 13 million will be farmed in Norway and 3.6 million in Iceland. This significant increase in smolt releases supports expectations of a significant increase in harvest volumes in the coming years, NRS said.

The NRS group currently owns 36,085 MT maximum-allowed biomass (MAB) for salmon farming in Troms and Finnmark, and 17,800 MT MAB for salmon farming and 5,300 MT MAB for trout farming in Iceland through Arctic Fish. In addition, the group has minority interest in two associated Norwegian fish farming companies which together own nine fish farming licenses. 

Last month, NRS and NRS Farming AS entered into a share purchase agreement to acquire 100 percent of the shares in SalmoNor from NTS ASA. SalmoNor is a fully integrated salmon farming company with a license portfolio in production area 7 in Central Norway and with an estimated harvesting volume of 34,750 MT in 2022 and 39,000 MT in 2023. In August 2021, Rørvik, Norway-based NTS beat out SalMar to purchase 70 percent of NRS, which it then merged with SalmoNor. On 16 February, 2022, SalMar’s bid to take over NTS moved forward after a majority of NTS shareholders accepted the Frøya, Norway-based salmon-farming firm’s share-purchase offer.

Photo courtesy of Norway Royal Salmon

Contributing Editor reporting from London, UK

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