Strong year start for SalMar, stake increased in Icelandic salmon business

Published on
May 23, 2019

SalMar delivered total operational earnings before interest and taxes (EBIT) of NOK 806.2 million (USD 92.1 million, EUR 82.7 million) in the first quarter of this year, up from NOK 708.1 million (USD 80.9 million, EUR 72.6 million) in Q1 2018. Thanks to the inclusion of Icelandic producer Arnarlax’s results for February and March 2019 and a higher volume harvested in northern Norway, this was its highest ever first-quarter EBIT.

The company’s shareholding in Arnarlax increased from 42 percent to 54 percent in the quarter, and in April it was raised to almost 62 percent through a compulsory purchase order.

"We continue to deliver good financial results. During the period, we also increased our shareholding in the Icelandic aquaculture company Arnarlax. As an industrial owner, SalMar will contribute to the sustainable development of fish farming on Iceland," SalMar CEO Olav-Andreas Ervik said.

The Frøya, Norway-headquartered salmon farmer’s gross operating revenues of almost NOK 3 billion (USD 342.6 million, EUR 307.6 million) in the last quarter were an improvement on Q1 2018’s NOK 2.5 billion (USD 285.5 million, EUR 256.3 million), while the harvest totaled 35,500 metric tons (MT), compared with 31,900 MT a year previously, and the operating EBIT per kilogram increased slightly to NOK 22.71 (USD 2.59, EUR 2.32).

SalMar’s sales and processing segment generated higher revenues of NOK 2.8 billion (USD 319.7 million, EUR 287.1 million) in the quarter. The unit’s operational EBIT of NOK 14.3 million (USD 1.6 million, EUR 1.5 million) was an improvement on Q1 2018’s loss of NOK 15.3 million (USD 1.7 million, EUR 1.6 million).

Regionally, Fish Farming Central Norway harvested a total of 18,200 MT of salmon in the last quarter, some 4,100 MT less than in Q1 2018. Most of the fish harvested in this period were transferred to the sea in autumn 2017, but premature harvesting was required due to illness at some sites. SalMar said this led to a higher production cost compared with previous quarters.   

Fish Farming Northern Norway harvested a total of 15,100 MT of salmon in the last quarter, which was 5,500 MT more than a year previously. The volume harvested during the period were fish transferred to the sea in the spring and autumn of 2017. 

In addition, Norskott Havbruk (Scottish Sea Farms) harvested 4,800 MT, compared with 6,500 MT in the first-quarter 2018. SalMar owns 50 percent of Norskott Havbruk. 

SalMar has forecast a harvest of 145,000 MT in 2019 from its Norwegian operations, while Norskott Havbruk (Scottish Seafarms) is expected to harvest 30,000 MT

Arnarlax harvested around 2,100 MT in February and March this year. During the same period, it generated gross operating revenues of NOK 132.9 million (USD 15.2 million, EUR 13.6 million) and made an operational EBIT of NOK 25.2 million (USD 2.9 million, EUR 2.6 million). This corresponds to an EBIT per kilogram of NOK 11.77 (USD 1.34, EUR 1.21). SalMar said operational improvements enabled the company to post a profit in the period, despite costs relating to high mortality at certain sites caused mainly by winter wounds. 

For the full-year 2019, Arnarlax is expected to harvest around 10,000 MT.

Image courtesy of SalMar 

Contributing Editor reporting from London, UK

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