Faroe Islands-headquartered salmon farmer Bakkafrost Group has entered into a sustainability-linked EUR 700 million (USD 789.5 million) multicurrency revolving credit facility, with the purpose to refinance its existing bank facilities as well as general corporate purposes including acquisitions.
With a tenor of five years, the facility will serve as a “robust and flexible financial framework” for Bakkafrost’s investment plans that are aimed at significant organic growth and also structural cost reductions in Scotland, as described at the group’s Capital Markets Day earlier this year.
“Bakkafrost is pleased by the increased financial flexibility and generally improved terms under the facility,” it said. “The margin payable will be linked to Bakkafrost's performance against certain sustainability KPIs, consistent with the group’s overall ESG targets and ambitions.”
The facility includes flexibility for the parties to agree an additional amount of up to EUR 150 million (USD 169.2 million) during the tenor.
Rabobank, DNB Bank, and Nordea Bank have agreed to continue their support as lenders. The facility is subject to the signing of a facility agreement, which is expected during the first quarter of 2022.
For Q3 2021, Bakkafrost posted total operational earnings before interest and taxes (EBIT) of DKK 70.5 million (USD 10.7 million, EUR 9.5 million), down from DKK 102.7 million (USD 15.6 million, EUR 13.8 million) in Q3 2020. Its Q3 profit of DKK 131.3 million (USD 19.9 million, EUR 17.7 million) fell from DKK 176.8 million (USD 26.8 million, EUR 23.8 million) in Q3 2020.
In total, Bakkafrost harvested 21,851 metric tons (MT) gutted-weight salmon in the three-month period, up slightly on Q3 2020, with its Faroese farms providing an increased 14,937 MT, while its Scottish operations supplied a lower 6,914 MT. However, the total harvested volume for the first nine months of 2021 was 71,075 MT, up from 60,424 MT a year ago.
Due to exceptionally high mortality levels in Scotland during the third quarter, it has lowered its expected harvest volume for Scotland to 30,000 MT gutted weight. As such, the total harvest volume for 2021 is expected to be 96,000 MT gutted weight, compared with 85,686 MT harvested in 2020.
For 2022, Bakkafrost expects its Faroese harvest volumes to reach 68,000 MT gutted weight, while 35,000 MT will come from its operations in Scotland, giving the group a total of 103,000 MT next year.
Photo courtesy of Bakkafrost
