Strong demand and an all-time high harvest volume saw SalMar deliver total operational earnings before interest and taxes (EBIT) of NOK 934.9 million (USD 108.1 million, EUR 95.8 million) in the fourth quarter of last year, up from NOK 707.2 million (USD 81.7 million, EUR 72.5 million) in Q4 2017.
The Frøya, Norway-headquartered salmon farmer generated gross operating revenues of NOK 3.1 billion (USD 358.3 million, EUR 317.8 million) in the last quarter, an improvement on Q4 2017’s NOK 2.8 billion (USD 323.6 million, EUR 287 million). Its harvest totaled 40,500 metric tons (MT), compared with 39,900 MT a year previously, while the operating EBIT per kg came to NOK 23.11 (USD 2.67, EUR 2.37) – an increase of NOK 5.41 (USD 0.63, EUR 0.55).
SalMar’s Sales and Processing segment generated higher revenues of NOK 3.1 billion (USD 358.3 million, EUR 317.7 million) in the quarter. However, the unit’s operational EBIT of NOK 79 million (USD 9.1 million, EUR 8.1 million) was down from NOK 176 million (USD 20.3 million, EUR 18 million).
The overall strong performance contributed to a record year for SalMar, with operating revenues in excess of NOK 11.3 billion (USD 1.3 million, EUR 1.2 million) and an operational EBIT of almost NOK 3.5 billion (USD 404.5 million, EUR 358.7 million).
Regionally, Fish Farming Central Norway harvested a total of 28,200 MT of salmon in the last quarter, some 1,300 MT more than in the previous quarter. The volume harvested in this period were fish transferred to the sea in autumn 2017, and SalMar said that this generation has had a more challenging production cycle than the spring 2017 generation. As a result, it harvested a larger number of fish at lower average weights than budgeted, which increased costs compared with the previous quarter.
Fish Farming Northern Norway harvested a total of 12,200 MT of salmon in the last quarter, some 9,000 MT more than in the previous quarter. The volume harvested during the period were fish transferred to the sea in the spring of 2017. Although this generation grew slower than planned, its development in the last period was good. This resulted in high average harvest weights and good price achievement in the quarter.
The first generation from its new open ocean farming system Ocean Farm 1 was also harvested during Q4 2018, and company CEO Olav-Andreas Ervik said that the project's biological results were good and had strengthened SalMar’s confidence in farming further out to sea.
“Our operations must be on the salmon's terms and not on the equipment's limitations. By continuing to invest in the entire supply chain, as well as further developing our ocean farming strategy, SalMar is building a strong platform for sustainable development and further growth," he said.
SalMar expects to harvest a total 145,000 MT of salmon in Norway in 2019, while Norskott Havbruk (Scottish Seafarms) is expected to harvest 30,000 MT and Icelandic producer Arnarlax is expected to harvest 10,000 MT.
Meanwhile, the company has entered into an agreement to acquire 3,268,670 shares in Arnarlax at NOK 55.00 (USD 6.36, EUR 5.64) per share, with the deal totaling almost NOK 180 million (USD 20.8 million, EUR 18.4 million). SalMar already owned 41.95 percent of the shares in the company and will by this transaction increase its ownership to 54.23 percent.
SalMar AS will offer to acquire the remaining 12,181,761 shares at approximately NOK 55.50 (USD 6.42, EUR 5.69) per share.
The chairman of the board at Arnarlax AS, Kjartan Olafsson, has confirmed that he wishes to continue as an owner and will not sell shares in response to the offer.
