Frøya, Norway-headquartered salmon farmer Måsøval posting posted decreased year-over-year operating revenues, as well as drops in sales revenue for both its farming and sales and processing segments in Q2 2023.
In its Q2 2023 report, Måsøval reported operating revenue of NOK 805 million (USD 75.9 million, EUR 69.9 million), down from the NOK 934 million (USD 88.1 million, EUR 81.1 million) the company reported for the corresponding period of 2022.
Its operational earnings before interest and taxes (EBIT) totaled NOK 211 million (USD 19.9 million, EUR 18.3 million), representing a decline of NOK 290 million (USD 27.3 million, EUR 25.2 million) year over year, with the decrease attributed to higher feed prices and costs related to sea lice treatments in its “Farming Mid” region.
Måsøval also harvested 7,573 metric tons (MT) of head-on gutted (HOG) weight fish in the three-month period, compared to 8,702 MT in Q2 2022. The group’s farming segment achieved sales of NOK 737 million (USD 69.5 million, EUR 64 million), of which NOK 699 million (USD 65.9 million, EUR 60.7 million) comprised the sale of salmon. Lower prices and a smaller harvest led to a NOK 135 million (USD 12.7 million, EUR 11.7 million) drop in the segment’s sales, while its operational EBIT fell from NOK 502 million (USD 47.3 million, EUR 43.6 million) to NOK 220 million (USD 20.7 million, EUR 19.1 million) year over year. The company’s Q2 2023 operational EBIT per kilogram was NOK 29.00 (USD 2.73, EUR 2.52), a stark decrease from the NOK 57.70 (USD 5.44, EUR 5.01) it raked in a year prior.
Måsøval’s sales and processing’s revenue fell NOK 119 million (USD 11.2 million, EUR 10.3 million) year over year to NOK 797 million (USD 75.1 million, EUR 69.2 million), and its operational EBIT slipped NOK 3 million (USD 282,854, EUR 260,405) to NOK 13 million (USD 1.2 million, EUR 1.1 million).
For the full year, Måsøval has implemented a harvest guidance of 24,300 MT, with 7,200 MT expected in the third quarter. However, the company said its co-location agreement signed in late 2022 with Frøya Laks to jointly manage 2,433 MAB biomass gives it a potential license portfolio is in excess of 33,000 MT.
Måsøval’s profit before tax was NOK 151 million (USD 14.2 million, EUR 13.1 million) in the quarter, but Norway’s implementation of a new 25 percent aquaculture resource rent added expenses totaling around NOK 275 million (USD 25.9 million, EUR 23.9 million). As such, the group reported a loss after tax of NOK 123 million (USD 11.6 million, EUR 10.7 million).
Måsøval said it is still waiting for detailed guidelines on its obligations under the new law from Norway’s tax authorities, and until that is received, it cannot calculate or properly account for the resource rent tax expenses for the period. But Måsøval maintains, along with other companies across Norway, that the tax is detrimental to employment and value creation in the coastal communities that host aquaculture operations. It also said it’s “particularly negative for companies like Måsøval with a high growth rate and significant investments.”
It said since the new tax does not award tax breaks for investments under development licenses, the group has canceled its Aqua Semi project. The company intended for Aqua Semi, for which the company received four development licenses in 2019, to open up new areas for salmon farming, reduce sea lice and disease contagion, improve fish health, and lower operational costs. Måsøval said the tax in its current form makes the project “economically non-viable” and confirmed it took a one-off write-down of the investment totaling NOK 45 million (USD 4.2 million, EUR 3.9 million).
“We regret that the resource rent tax cancels an investment that would have led to a better and more sustainable method for fish farming while bringing significant activity to the supplier industry in Norway,” it stated.
With the licenses still valid, the company can restart the project any time up until 2027.
On 31 August 2023, Måsøval announced the appointment of Anders Hagestande as the company's new chief financial officer, effective 18 September. Hagestande replaces Gunnar Aftret, who tendered his resignation in May 2023. Before joining Måsøval, Hagestande served as CFO at Blue Resource Group and, prior to that, served as CFO at Bjørøya. He has also been a board member at both Filetfabrikken AS and Villa Seafood AS, a financial controller at Novea Sea AS, and a business developer at AquaGen AS.
“Fish farming is a team sport. To be granted a key role in such a strong organization is a huge vote of confidence, and it means a lot to me,” Hagestande said.
To ensure a successful and smooth transition, Aftret will remain available to the company in a role as financial advisor until no later than 30 November, according to Måsøval.
Photo courtesy of Måsøval
