Good biological and operational performances led SalMar ASA to deliver improved third-quarter financial results, with the Norwegian-headquartered salmon farming group achieving total operational earnings before interest and taxes (EBIT) of NOK 646.8 million (USD 71 million, EUR 60.2 million), up from NOK 613.5 million (USD 67.4 million, EUR 57.1 million) in Q3 2019.
SalMar's Norwegian operations reported an operational EBIT of NOK 668.7 million (USD 73.4 million, EUR 62.2 million) in the quarter, up 13 percent year-on-year.
Also in the three-month period, SalMar generated gross operating revenues of just over NOK 2.9 billion (USD 318.3 million, EUR 269.6 million), compared with just under NOK 2.8 billion (USD 307.4 million, EUR 260.2 million) a year previously. Its EBIT per kilogram in this period was NOK 17.42 (USD 1.91, EUR 1.62), which represented an increase of NOK 0.36 (USD 0.04, EUR 0.03) year-on-year.
It harvested 37,100 metric tons (MT) of salmon during the past months, some 1,300 MT more than in Q3 2019. At the same time, Norskott Havbruk (Scottish Sea Farms) harvested 8,100 MT, down 1,900 MT from Q3 2019. SalMar owns 50 percent of Norskott Havbruk.
“Good strategic assessments and a clear operational focus have led to strong biological and operational performance throughout the entire value chain," SalMar CEO Gustav Witzøe said. "This has resulted in good capacity utilization, good cost development, and solid price achievement with associated margins. This in a period of increased uncertainty both for employees and in the market caused by the Covid-19 pandemic."
SalMar’s largest business segment, Fish Farming Central Norway, harvested a total of 30,100 MT of salmon in the last quarter, compared with 28,100 MT in the corresponding period of last year. With the increased volume offsetting a reduction in the average salmon price, the unit’s operating revenue increased to NOK 1.6 billion (USD 175.6 million, EUR 148.7 million) for the quarter. The EBIT per kilogram gutted weight fell to NOK 17.51 (USD 1.92, EUR 1.63), down from NOK 19.35 (USD 2.12, EUR 1.80) in Q3 2019.
Its Fish Farming Northern Norway segment harvested 5,300 MT of salmon, which was 100 MT less than in the corresponding quarter of last year. It generated gross operating revenues of NOK 250 million (USD 27.4 million, EUR 23.2 million) in the quarter, down from NOK 275 million (USD 30.2 million, EUR 25.5 million) in Q3 2019. However, the segment’s EBIT per kilogram was NOK 11.55 (USD 1.27, EUR 1.07), up from NOK 1.08 (USD 0.12, EUR 0.10).
As had been indicated by SalMar’s previous interim report, Iceland Salmon (formerly Arnarlax) posted a weak financial result in the third-quarter. This was attributed to weak price achievement and a high production cost for the 2018 generation of fish harvested.
It produced 1,700 MT of salmon, some 600 MT less than in Q3 2019. Operating revenues fell NOK 42 million (USD 4.6 million, EUR 3.9 million) to NOK 110 million (USD 12.1 million, EUR 10.2 million), while its operational EBIT also fell NOK 42 million to a loss of NOK 22 million (USD 2.4 million, EUR 2 million). The EBIT per kilogram gutted weight dropped from NOK 9.54 (USD 1.05, EUR 0.89) to a loss of NOK 12.81 (USD 1.40, EUR 1.19).
Last month, Icelandic Salmon carried out a successful private placement of shares worth around NOK 647 million (USD 70.9 million, EUR 60.1 million), with its first day of trading on the Merkur Market on 27 October.
Meanwhile, SalMar’s sales and processing segment generated revenues of NOK 2.9 billion in the last quarter, up from NOK 2.7 billion (USD 296.1 million, EUR 250.9 million). Its operational EBIT of NOK 156 million (USD 17.1 million, EUR 14.5 million) was up on Q3 2019’s NOK 102 million (USD 11.2 million, EUR 9.5 million).
SalMar expects to harvest a total 152,000 MT of salmon in Norway in 2020, increasing to 163,000 MT in 2021. In Iceland, it has projected a 12,000 MT harvest this year and 14,000 MT next year.
Additionally, SalMar, which owns 50 percent of Norskott Havbruk, said it expects that subsidiary to harvest 36,000 MT in 2021. Horskott Havbruk owns 100 percent of Scottish Sea Farms Ltd., Great Britain’s second-largest salmon farmer.
