Trondheim, Norway-headquartered Norway Royal Salmon (NRS) has reported operational earnings before interest and taxes (EBIT) of NOK 131 million (USD 14.3 million, EUR 13 million) for the third quarter of this year and EBIT per kilogram of NOK 17.97 (USD 1.96, EUR 1.78). Corresponding figures for Q3 2018 were NOK 34 million (USD 3.7 million, EUR 3.4 million) and NOK 22.10 (USD 2.41, EUR 2.19) per kilogram.
According to NRS’s Q3 update, payments for growth investments in the group’s Arctic Offshore Farming initative and a new smolt facility, as well as the build-up of existing biomass, resulted in an increase in net interest-bearing debt in the quarter to NOK 926 million (USD 101.2 million, EUR 91.8 million). Equity at the end of the quarter was nearing NOK 2.3 billion (USD 251.4 million, EUR 228 million).
“The group's main operations in Region North contributed with a stable and good performance on harvested fish, while Region South had a weak result in the quarter,” NRS CEO Charles Høstlund said. “NRS shall grow through sustainable growth, the group increased its biomass in the sea by 32 percent during the quarter and plans to increase the biomass further in the fourth quarter.”
Region North posted an operational EBIT of NOK 138.7 million (USD 15.2 million, EUR 13.7 million) in the quarter, compared with NOK 53 million (USD 5.8 million, EUR 5.3 million) in the corresponding quarter of last year. Operational EBIT per kilogram gutted weight was NOK 19.60 (USD 2.14, EUR 1.94) compared with NOK 22.27 (USD 2.43, EUR 2.21).
Region South’s operational EBIT dropped by NOK 3.7 million (USD 404,367, EUR 366,754) in the quarter, compared with a gain of NOK 1.8 million (USD 196,719, EUR 178,429) in the corresponding quarter of 2018. Operational EBIT per kilogram gutted weight equated to a loss of NOK 8.45 (USD 0.92, EUR 0.84), compared with a gain of NOK 18.05 (USD 1.97, EUR 1.79).
The strategic assessment of the group's operations in Region South was completed with a signed sales agreement on 26 September with an enterprise value in excess of NOK 1.2 billion (USD 131.2 million, EUR 119 million). With the transaction expected to be completed in December, Region South was treated as an entity held for sale in the third-quarter reporting.
NRS harvested 7,513 metric tons (MT) of gutted weight salmon in the quarter, which is 203 percent higher than in Q3 2018. Some 7,076 MT of the total volume were harvested in Region North and 437 MT in Region South. The estimated harvest volume for the full year 2019 is 31,000 MT – down 4,000 MT on the previous forecast.
For 2020, the estimated harvest volume is 37,000 MT, an increase of 32 percent compared with the volume of Region North in 2019.
The estimated number of smolt put to sea in 2019 is 12.1 million, of which 10.1 million was in Region North and 2 million in Region South. The sales business sold 24,736 MT of salmon during the last quarter, which was 66 percent higher than in the corresponding period of 2018.
In addition to owning salmon farming sites in West Finnmark, Troms, and Haugsund, NRS has minority interests in three associated Norwegian fish farming companies that own 10 fish farming licenses, as well as Arctic Fish in Iceland.
Photo courtesy of Norway Royal Salmon
