Frøya Municipality, Norway-based SalMar has entered into an agreement with AS Knutshaugfisk to acquire a controlling stake in the company, SalMar announced recently.
SalMar said pending necessary regulatory approvals, it will acquire Knutshaugfisk via a combination of settlement in shares and cash. According to SalMar, the family-owned salmon farmer currently has licenses to farm 3,464 metric tons (MT) of salmon across four farming locations in central Norway.
"Knutshaugfisk is a well-run family company with which we have developed a close and value-creating collaboration over many years,” SalMar CEO Frode Arntsen said. “SalMar's purchase of a significant stake in the company is a natural continuation of this collaboration.”
SalMar said it expects the transaction to be completed in January 2025.
SalMar made the announcement as part of its Q3 2024 results report, which revealed drops in profit, earnings, and revenue in the quarter.
SalMar reported an operational EBIT for the group of NOK 1.04 billion (USD 94 million, EUR 89 million) in Q3 2024, down sharply from the NOK 2.29 billion (USD 208 million, EUR 196 million) it posted in Q3 2023. The company’s EBIT per kilogram dropped to NOK 17.30 (USD 1.57, EUR 1.48) in Q3 2024, down from NOK 29.30 (USD 2.66, EUR 2.51) per kilogram in Q3 2023.
The drop in EBIT coincided with a drop in revenue from NOK 7.5 billion (USD 681 million, EUR 643 million) in Q3 2023 to NOK 6.1 billion (USD 554 million, EUR 523 million) in Q3 2024.
The group’s profit dropped even more sharply. The company posted profit before tax from continuing operations of NOK 839 million (USD 76 million, EUR 72 million) in Q3 2024, down from the NOK 2.3 billion (USD 208 million, EUR 197 million) it posted in Q3 2023.
“Although the result is affected by challenges at sea, the result also shows that the structure we have in SalMar is solid and rigged to handle challenging periods, which means that the financial results are acceptable for the period,” Arntsen said. “Going forward, we are fully focused on improving performance and exploiting the potential that we see lies in the value chain.”
SalMar said the company’s farming segments in Norway continue to face biological challenges, stemming from the ripple effects of string jellyfish attacks. In December 2023, the company culled approximately 1.2 million salmon at its Ørnfjordbotn, Senja, Norway-based salmon farm after an influx of Apolemia uvaria harmed and killed fish.
The jellyfish attacks dampened the company’s financial results in FY 2023, and the company said ripple effects from those attacks – coupled with record high sea temperatures and high sea lice pressure – impacted the company’s biological performance during the period.
As a result, SalMar reduced its volume expectations for 2024 to 217,000 MT – down from the 237,000 MT it forecast in Q1 2024. Harvest volume in Q3 2024 was 60,300 MT, directly in line with the 60,300 MT of Atlantic salmon it harvested in Q3 2023.
By segment, SalMar’s Fish Farming Central Norway posted a drop in operating revenue from NOK 3.8 billion (USD 345 million, EUR 325 million) in Q3 2023 to NOK 2.7 billion (USD 245 million, EUR 231 million) in Q3 2024. Operating EBIT dropped from NOK 1.2 billion (USD 109 million, EUR 103 million) in Q3 2023 to NOK 483 million (USD 43 million, EUR 41 million). The segment also posted a big drop in EBIT per kilogram from NOK 24.90 (USD 2.26, EUR 2.13) in Q3 2023 to NOK 12.70 (USD 1.15, EUR 1.08) in Q3 2024.
The company cited biological challenges for the drop in revenue and EBIT but said the overall biological status of the fish in the sea is “satisfactory.”
Fish Farming Northern Norway posted a drop in revenue from NOK 2 billion (USD 181 million, EUR 171 million) in Q3 2023 to NOK 1.2 billion (USD 109 million, EUR 103 million) in Q3 2024. Operational EBIT dropped from NOK 868 million (USD 79 million, EUR 74 million) in Q3 2023 to NOK 190 million (USD 17 million, EUR 16 million) in Q3 2024, as the company’s EBIT per kilogram plunged from NOK 33.80 (USD 3.06, EUR 2.89) to NOK 10.40 (USD 0.94, EUR 0.89).
SalMar’s Sales and Industry segment was a bright spot for the company, with a slight year-over-year decrease in revenue in Q3 2024 from NOK 7.2 billion (USD 653 million, EUR 617 million) to NOK 6.1 billion (USD 553 million, EUR 525 million). However, its operational EBIT rose from NOK 236 million (USD 21 million, EUR 20 million) to NOK 464 million (USD 42 million, EUR 39 million) in Q3 2024.
“The segment continued to showcase its flexible operational setup, being able to handle volumes from challenges at the farming sites,” SalMar said.
SalMar’s subsidiary Icelandic Salmon posted a drop in revenue from NOK 476 million (USD 43 million, EUR 40 million) in Q3 2023 to NOK 169 million (USD 15 million, EUR 14 million) in Q3 2024. The company’s operational EBIT dropped to a loss of NOK 35 million (USD 3.1 million, EUR 3 million), down from a gain of NOK 35 million (USD 3.1 million, EUR 3 million) in 2023.
SalMar said purposefully low harvests in the period to build more biomass caused low volumes and high costs for the fish it did harvest.
SalMar’s joint venture Scottish Sea Farms performed better than most of the company’s other segments, with an increase in revenue to NOK 1.2 billion (USD 109 million, EUR 103 million) in Q3 2024 – up from NOK 867 million (USD 78 million, EUR 74 million) in Q3 2023. Operational EBIT also improved, rising to NOK 90 million (USD 8.2 million, EUR 7.7 million) in Q3 2024 from a NOK 121 million (USD 11 million, EUR 10.3 million) loss in Q3 2023.
SalMar said Scottish Sea Farms saw its harvest increase to 11,900 MT, up from 8,800 MT in the same period last year.
SalMar Aker Ocean, meanwhile, posted NOK 146 million (USD 13 million, EUR 12.5 million) in operating revenues – the first Q3 that the segment has posted revenue in. SalMar said the offshore farming arm of the company has posted strong biological performance in its recent production cycles, with low mortality, strong growth, and few sea lice treatments. Currently, SalMar is forecasting SalMar Aker Ocean will have a harvest of 9,000 MT in 2025.
Arntsen said the positive performances despite the challenges across multiple segments demonstrates the company’s resilience to negative impacts.
“We consider ourselves well positioned to exploit the potential we have in the value chain going forward,” he said. “Although we have experienced challenges in 2024 that have affected the slaughter volumes, we are adapting to the challenges we have experienced through action in the entire value chain and are still confident of reaching our volume potential.”
