Faroe Islands-headquartered Atlantic salmon producer Bakkafrost Group delivered total operating earnings before interest and taxes (EBIT) of DKK 223.5 million (USD 36.6 million, EUR 30.1 million) in the first-quarter of this year, down from the DKK 248.1 million (USD 40.6 million, EUR 33.4 million) that it posted for the corresponding period of 2020 – with the COVID-19 pandemic continuing to disrupt salmon markets.
Group profit for the three-month period was DKK 407.7 (USD 66.7 million, EUR 54.8 million), reversing a loss of DKK 148 million (USD 24.2 million, EUR 19.9 million) in Q1 2020, while revenues slipped by almost DKK 80 million (USD 13.1 million, EUR 10.8 million) to less than DKK 1.18 billion (USD 193.1 million, EUR 158.7 million).
“Overall, we are satisfied with the results from this quarter. The salmon market has been severely hampered by the COVID-19 pandemic, but during this quarter we have also seen clear signs of improvements in the market. The global supply of salmon in this quarter increased by nearly 16 percent, compared to the first-quarter last year. Despite such increase in supply, salmon prices increased during the quarter,” Bakkafrost CEO Regin Jacobsen said.
As well as a “very strong” demand for salmon in retail channels, the foodservice segment also picked up again in the quarter, Jacobsen said.
“We expect this positive development to continue as COVID-19 mass vaccination progresses in the key markets for salmon. All in all, the salmon market outlook is good for the rest of 2021 as the global supply is expected to decrease somewhat, compared to the same period last year,” Jacobsen said.
Bakkafrost’s salmon harvest in the quarter amounted to 21,027 metric tons (MT) gutted weight, up from 17,935 MT a year previously. Of this, some 14,025 MT was from the Faroes (up from 10,667 MT in the first-quarter of last year), and 7,002 MT from Scotland (7,268 MT in Q1 2020).
Its farming segment Faroe Islands (FO) achieved an operational EBIT of DKK 143.3 million (USD 23.4 million, EUR 19.3 million) in the quarter, down from DKK 202.9 million (USD 33.2 million, EUR 27.3 million), while its farming segment Scotland’s (SCT) operational EBIT represented a loss of DKK 6.2 million (USD 1 million, EUR 833,820), down from gains of DKK 29.7 million (USD 4.9 million, EUR 4 million) in Q1 2020.
The value-added products (VAP) segment achieved an operational EBIT of almost DKK 75 million (USD 12.3 million, EUR 10.1 million), up from losses of DKK 10.8 million (USD 1.8 million, EUR 1.5 million) in Q1 2020.
Its FOF segment’s (fishmeal, oil, and feed) performance declined with operational earnings before interest, taxes, depreciation, and amortization (EBITDA) of DKK 48.3 million (USD 7.9 million, EUR 6.5 million), an increase of DKK 8.1 million (USD 1.3 million, EUR 1.1 million) on the corresponding period of last year.
“We are especially pleased with the strong results from the VAP segment. Once again, we have seen the benefit of having a flexible value chain which is of great importance to us to maintain our competitive position,” Jacobsen said. “The farming segment in the Faroe Islands has performed well and the biology has been strong with good growth and low feed conversion factor. Quarter by quarter our average smolt size increases which also was the case in this quarter. In Scotland, the farming performance is gradually improving, and we expect to see some increase in average smolt size by the end of this year.”
Bakkafrost’s harvest volumes for 2021 from the Faroe Islands are expected to be 66,000 MT gutted weight and 40,000 MT gutted weight in Scotland, resulting in a total harvest of some 106,000 MT, compared with 85,686 MT harvested in 2020.
It also anticipates releasing 14.5 million smolts in the Faroe Islands, compared to 14.3 million smolts in 2020 and 12.7 million smolts in 2019. The smolt release in Scotland is expected to be 11 million smolts, compared to 10.4 million smolts in 2020, and 12.4 million smolts in 2019.
Depending on external sales, Bakkafrost also anticipates selling 120,000 MT of fish feed this year. The main recipient of Havsbrún´s fish feed is the local Faroese market, including Bakkafrost FO’s internal use of fish feed. This feed is also used in the Scottish farming operations.
Photo courtesy of Bakkafrost
