SalMar replaces CEO, reports good results despite ISA detection

Published on
May 13, 2016

Trond Williksen will replace Leif Inge Nordhammer as CEO of SalMar ASA, the Norwegian salmon farming and processing company announced in its quarterly earnings report.

Nordhammer asked to be replaced after serving two tenures as CEO over 17 years. Williksen, who will take over on 1 January, 2017, has headed up aquaculture equipment supplier AKVA Group since 2011. Prior to that job, he worked in Aker Group’s fisheries section and at KPMG as a consultant.

"In Trond Williksen, SalMar ASA has secured the service of a new CEO with long experience and a strong position in the fisheries and aquaculture industries,” SalMar Chairman Bjørn Flatgård said. “At the same time, I would like to express my sincere thanks to Leif Inge Nordhammer for his performance at the helm of SalMar, where he has contributed greatly to the company's development over the past few years. With the appointment of Trond Williksen, we intend to continue the company's positive trend going forward.”

Also in the announcement, the company reported solid results for the first quarter of 2016, a result of higher Atlantic salmon prices due to the ongoing supply troubles in Chile. The company’s overall positive performance was hurt, however, by a high contract rate and the discovery of ISA at two of SalMar’s facilities in central Norway.

"SalMar's good result is driven by high prices," Nordhammer said. "The biological situation remains challenging, but investments in treatment capacity means that we are in a better position to handle the situation than ever before. After the close of the quarter, ISA has been identified at two of SalMar's facilities in Central Norway. SalMar has already started to harvest out the fish concerned. SalMar is taking this situation very seriously, and is working closely with the relevant authorities and other parties."

SalMar’s gross operating revenues for the quarter were NOK 2 billion (USD 244.2 million, EUR 215.5 million), up from NOK 1.6 billion (USD 195.3 million, EUR 17.24 million) in Q1 2015. That was in spite of the company harvesting fewer fish – 27,300 metric tons, compared to 28,100 in Q1 2015.

The company announced that in April, ISA was identified at two of the company's sites outside Frøya. SalMar is in the process of harvesting all fish found to have the disease at the sites, it said. SalMar also reported higher costs due to sea lice infestations, which have contributed to higher mortality rates and reduced growth. As a result of these issues, the company said the “health status of some of the biomass has been weaker than before,” resulting in a change in harvesting procedure.

“SalMar has elected to bring forward the harvesting of this portion of the biomass. This has resulted in lower harvested weights, higher costs per kg and lower prices achieved,” the company said said. In regard to sea lice, “Salmar has invested heavily in its treatment capacity, as a result of which it is now much better equipped to deal with the situation. Moving forward, this is expected to have a positive effect.”

Despite the challenges, SalMar said it expected increased profits in the rest of 2016, a result of the tightening of the global salmon market due to reduced supply. The company said it expected a seven percent decrease in total supply of Atlantic salmon in the remainder of 2016, the equivalent of 160,000 metric tons.

“As a result of the tight salmon market, combined with a substantial willingness to pay for salmon, the company also expects strong results in the forthcoming quarters of 2016,” the company said.

In Norway, SalMar expects to harvest around 131,000 metric tons of salmon in 2016, while its holdings in Norskott Havbruk (Scottish Seafarms) are expected to produce 26,000 metric tons.

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