Record Q3 harvest boosts SalMar earnings, increased volumes expected in 2022
A record harvest volume of 52,100 metric tons (MT), together with solid biological and operational performances, led Frøya Municipality, Norway-headquartered salmon farming group SalMar ASA to deliver improved third-quarter financial results.
SalMar achieved operational earnings before interest and taxes (EBIT) of NOK 748 million (USD 85.5 million, EUR 75.6 million), up from NOK 647 million (USD 73.9 million, EUR 65.4 million) in Q3 2020. The company’s Norwegian operations reported an increased operational EBIT of NOK 743 million (USD 84.9 million, EUR 75.1 million) in the quarter, while Icelandic Salmon AS increased its operational EBIT to NOK 5 million (USD 571,456, EUR 505,350). The regions’ EBITs-per-kilogram were NOK 14.95 (USD 1.71, EUR 1.51) and NOK 14.35 (USD 1.64, EUR 1.45), respectively.
In the three-month period, SalMar generated gross operating revenues of just over NOK 4 billion (USD 457.2 million, EUR 404.3 million), compared with NOK 2.9 billion (USD 331.5 million, EUR 293.1 million) a year previously.
The aforementioned total harvest was 15,000 MT more than in Q3 2020, with a record 34,200 MT from its Fish Farming Central Norway segment, 15,500 MT from Fish Farming Northern Norway, and 2,400 MT from Icelandic Salmon. At the same time, Norskott Havbruk (Scottish Sea Farms) harvested 11,400 MT, up 3,100 MT from Q3 2020. SalMar owns 50 percent of Norskott Havbruk.
SalMar CEO Gustav Witzøe said the company was “particularly pleased” with the results from its farming operations in the quarter.
“As always, sound operations on the salmon's terms combined with our employees' high level of professionalism is what has made this possible,” he said. “In the third quarter, we have also taken several important strategic steps that will enable SalMar to continue growing. We have made strategic acquisitions in the value-chain, we are about to complete our new harvesting and processing plant in Northern Norway, and we have embarked on a partnership with Aker which will strengthen our offshore fish-farming activities.”
In August, SalMar ASA and Aker ASA confirmed the establishment of the joint offshore aquaculture company SalMar Aker Ocean AS. The new venture will engage in offshore fish-farming in coastal waters exposed to severe weather conditions and far out to sea, with SalMar owning 66.6 percent and Aker 33.4 percent.
SalMar’s third-quarter report confirmed the company's current interests in offshore aquaculture will be incorporated into the new company, while Aker will contribute NOK 1.65 billion (USD 188.7 million, EUR 166.7 million) in cash in three tranches.
"SalMar has considerable flexibility to realize our growth strategy, and we continue to make strategic investments along the value chain, both coastal and offshore, with undiminished strength. The investments we are doing create a foundation for continued environmental quality and financial good results in the future," Witzøe said.
For the first nine months of 2021, SalMar generated gross operating revenues of almost NOK 10.4 billion (USD 1.2 billion, EUR 1.1 billion), up from just under NOK 9.9 billion (USD 1.1 billion, EUR 1 billion) in the corresponding period in 2020. Excluding Norskott Havbruk, it had harvested 125,600 MT by 30 September, 2021. In the same period last year, some 118,000 MT was harvested.
Operational EBIT for Q3 totaled NOK 2 billion (USD 228.7 million, EUR 202.2 million), down from NOK 2.6 billion (USD 297.3 million, EUR 262.8 million) in the year to 30 September, 2020. This gave SalMar an operational EBIT-per-kilogram of NOK 16.21 (USD 1.85, EUR 1.64), compared with NOK 21.99 (USD 2.51, EUR 2.22) per kilogram in the first three quarters of 2020.
According to the Q3 report, SalMar has increased its forecast for the volume to be harvested in Norway in 2021 by 6,000 MT to 169,000 MT. At the same time, it is reducing its harvesting forecast for Iceland to 12,000 MT and for Scotland to 33,000 MT.
It said that it expects costs to be slightly lower and the harvested volume higher in Q4 than in Q3.
In 2022, SalMar expects to harvest 175,000 MT in Norway, up 6,000 MT; 16,000 MT in Iceland, up 4,000 MT; and 46,000 MT in Scotland, up 13,000 MT. The large increase in Scotland is partially attributable to the acquisition of Grieg Seafood Hjaltland UK in Shetland.
Photo courtesy of SalMar ASA