A harvest volume of 53,600 metric tons (MT) combined with a solid operational performance led Norway-based salmon farming group SalMar ASA to deliver improved third-quarter financial results.
The company posted total operational earnings before interest and taxes (EBIT) of over NOK 1.31 billion (USD 125 million, EUR 127.6 million), up from NOK 748 million (USD 71.4 million, EUR 72.8 million) in Q3 2021.
SalMar’s Norwegian operations reported an increased operational EBIT of NOK 1.3 billion (USD 124.1 million, EUR 126.6 million) in the quarter, producing 49,800 MT of fish. At the same time, Icelandic Salmon AS increased its operational EBIT to 39 million (USD 3.7 million, EUR 3.8 million), and harvested 3,800 MT of salmon. The regions’ EBITs-per-kilogram were NOK 26.29 (USD 2.51, EUR 2.56), and NOK 10.16 (USD 0.97, EUR 0.99) respectively.
The group’s total harvest was 1,500 MT more than a year previously.
In the three-month period, SalMar generated gross operating revenues of almost NOK 4.9 billion (USD 467.7 million, EUR 477.2 million), an increase of NOK 879 million (USD 83.9 million, EUR 85.6 million) compared with Q3 2021.
“The whole aquaculture industry is experiencing inflationary pressure, but we remain committed to our strategy, operating on the terms of the salmon and delivering products of excellent quality,” SalMar CEO Frode Arntsen said. “Through the third-quarter, we have had a record high volume through our harvesting and processing facilities. And I am particularly pleased to see that the development in our new facility at Senja in northern Norway, InnovaNor, improves with each passing week. This strengthens our belief in our growth ambitions going forward.”
The Q3 2022 report advised that Icelandic Salmon delivered a “solid performance,” but results were affected by the lower spot prices compared with the previous quarter.
Looking forward, SalMar stated that the completed merger with Norway Royal Salmon ASA (NRS) which came with the acquisition of all outstanding shares in NRS’s owner, NTS ASA, will strengthen SalMar’s activities, but it also highlighted the “uncertain situation” caused by the new tax system proposed by the Norwegian government, with Arntsen confirming that the group has put future investments on hold.
As part of the transaction the company’s 51.28 percent stake in Arctic Fish is being sold to Mowi for NOK 115 (USD 10.98, EUR 11.20) per share, equating to a total NOK 1.9 billion (USD 181.3 million, EUR 185 million). The deal is subject to the E.U. Commission’s approval of the buyer and agreed terms.
“The strategic and operational rationale linked to the transaction is still good, and even if the industry has to scale back and reduce other planned investments, the need for increased efficiency and economies of scale has now become even greater. We are therefore very happy to have completed this important transaction," Arntsen said.
Arntsen was critical of the proposal to increase taxes on seafood production from 22 to 62 percent.
“No other country has introduced a tax of this kind and at this level on its food production,” Arntsen said. “Both level and structure will divert investments from aquaculture in Norway to other countries and other industries. This will strongly affect innovation power and investments on the Norwegian coast. The tax will mean a sharp confiscation of investment capital for innovation and industrial construction in both aquaculture as well as adjacent and other industries."
For the first nine months of 2021, SalMar generated gross operating revenues of almost NOK 13.8 billion (USD 1.3 billion, EUR 1.3 billion), up from just less than NOK 10.4 billion (USD 992.6 million, EUR 1 billion) in the corresponding period of 2021.
Operational EBIT for the period reached almost NOK 3.5 billion (USD 334 million, EUR 340.8 million), up from just over NOK 2 billion (USD 190.9 million, EUR 194.8 million) in the year to 30 September 2021. This gave an operational EBIT-per-kilogram of NOK 26.40 (USD 2.52, EUR 2.57), compared with NOK 16.21 (USD 1.55, EUR 1.58) per kilogram in the first three quarters of 2021.
Following completion of the aforementioned deals, SalMar has increased its 2022 full-year volume guidance in Norway by 5,000 MT to 180,000 MT. Its volume guidance Iceland is kept unchanged and for Scottish Sea Farms the volume guidance is reduced by 8,000 MT.
In 2023, SalMar expects significant volume growth – from 215,000 MT up to 281,500 MT, including 243,000 MT in Norway, and 16,000 MT in Iceland.
Photo courtesy of SalMar
