BAKKAFROST IN EXCELLENT POSITION TO MOVE FORWARD

Bakkafrost in excellent position to move forward, despite impact of pandemic. The Bakkafrost Group delivered a total operating EBIT of DKK 102.7 million in the third quarter of2020. Total harvested volumes were 21.6 thousand tonnes gutted weight (tgw). Faroe Islands (FO): 11.1 tgw, Scotland (SCT): 10.5 tgw. The combined FO farming and VAP segments made an operational EBIT of DKK 118.4 million. The FO farming segment made an operational EBIT of DKK 96.6 million. The SCT farming segment made an operational EBIT of DKK -28.4 million. The VAP segment made an operational EBIT of DKK 21.8 million. The EBITDA for the FOF segment was DKK 69.5 million.

On the 8th of October 2019, Bakkafrost acquired majority of the Scottish Salmon Company (SSC). From this date, SSC is a part of the Bakkafrost Group and is consolidated into Bakkafrost’s accounts. Unless otherwise stated, all figures presented in this press release include SSC from this date on. SSC’s figures prior to this date are not included in the figures for the Group for the full year 2019 or in other comparative figures prior to this date.

The Group made a profit for Q3 2020 of DKK 176.8 million (DKK 180.9 million). For the first nine months of 2020, the profit was DKK 500.5 million (DKK 582.4 million). Total harvested volumes for Q3 2020 were 21,611 tonnes gutted weight. FO: 11,135 tgw (12,938 tgw), SCT: 10,476 tgw (n/a). Total harvested volumes in the first nine months of 2020 were 60,424 tgw (39,254 tgw). FO: 34,743 tgw (39,254 tgw), SCT: 25,681 tgw (n/a). In total, 4.8 million (2.4 million) smolts were transferred during Q3 2020. FO: 3.6 million (2.4 million), SCT: 1.3 million (n/a). For the first nine months of 2020, 13.9 million (7.7 million) smolts were transferred. FO: 8.7 million (7.7 million), SCT 5.2 million (n/a).

Commenting on the result, CEO Regin Jacobsen said:

“During this quarter, the global salmon market has again been affected by the Covid-19 pandemic, putting pressure on the salmon industry and affecting the financial returns across the industry negatively. Throughout the third quarter, we have, however, been able to maintain a steady supply to our customers. In the VAP segment, the supply has been higher than in a normal third quarter due to a strongly increased demand from our retail customers in Europe and the US. The sales to Russia have picked up again as well in this quarter.

“The biology in the Faroe Islands has performed strongly, and the harvested fish has had a high quality. This is partly a result of our investments in our ability to produce larger smolts. Our investments in increased hatchery capacity – latest with the completion of the Strond hatchery – has enabled us to increase the average smolt size significantly, and this increase will continue as we have now commenced the expansion of the hatcheries at Norðtoftir and Glyvradalur. In 2022, we expect to reach our target average smolt size of 500g.

“We are now able to observe that the high quality of the larger smolts produced has a positive impact on the performance of the smolts released into our marine sites, which in combination with good stewardship and proper care make up good end results.

“In 2013, we set ourselves the ambitious goal to become 100% ASC* certified in 2020, and since then we have worked very hard to make it happen (*Aquaculture Stewardship Council). This has required huge commitment from our employees, who have worked hard on changing the way we operate, and to establish the necessary competences in the company. I am therefore extremely pleased to be able to announce that we have now got the final piece of the puzzle in place:

“All Bakkafrost salmon in the Faroe Islands is now 100% ASC certified.

“With our unique selling points, a flexible value chain, increasing harvest volumes and a tight market outlook for 2021, it is our view that Bakkafrost is in an excellent position.”

The combined FO farming and VAP segments made an operational EBIT of DKK 118.4 million (DKK 257.3 million) in Q3 2020. The operational EBIT per kg in Q3 2020 was DKK 10.63 (DKK 19.89), which corresponds to NOK 15.24 (NOK 26.25) for the combined FO farming and VAP segments. For the first nine months of 2020, the combined FO farming and VAP segments made an operational EBIT of DKK 444.9 million (DKK 791.8 million).

The FO farming segment made an operational EBIT of DKK 96.6 million (DKK 231.5 million) in Q3 2020. The harvested volumes were lower, and the achieved prices were slightly lower in Q3 2020, compared to Q3 2019. For the first nine months of 2020, the operational EBIT was DKK 385.3 million (DKK 764.7 million).

The SCT farming segment made an operational EBIT of DKK -28.4 million in Q3 2020. For the first nine months of 2020, the operational EBIT was DKK 30.1 million. Costs of DKK 41 million relate to incident-based mortality in Q3 2020.

The VAP segment made an operational EBIT of DKK 21.8 million (DKK 25.9 million) for Q3 2020. For the first nine months of 2020, the operational EBIT was DKK 59.6 million (DKK 27.1 million).

The FOF segment (fishmeal, oil and feed) made an EBITDA of DKK 69.5 million (DKK 94.5 million) for Q3 2020, and the EBITDA margin was 14.4% (19.5%). The EBITDA was DKK 159.6 million for the first nine months of 2020 (DKK 218.1 million), corresponding to an EBITDA margin of 15.1% (20.8%).

During Q3 2020, Havsbrún sourced 24,101 tonnes (17,845 tonnes) of raw material, and in the first nine months of 2020, Havsbrún sourced 211,420 tonnes (243,484 tonnes) of raw material.

The Group has been impacted by the market disruption from Covid-19 from late Q1 2020.

The net interest-bearing debt amounted to DKK 1,256.7 million at the end of Q3 2020, compared to DKK 1,018.7 million at year-end 2019. Undrawn credit facilities amounted to DKK 2,163 million at the end of Q3 2020.
The equity ratio was 68% at 30 September 2020, compared to 65% at the end of 2019.