COVID-19 HITS NORWAY ROYAL SALMON EARNINGS
Covid-19 hits Norway Royal Salmon earnings. Norway Royal Salmon (NRS) reported an operational EBIT of MNOK 75 for the first quarter 2020 and EBIT per kg of NOK 16.53. Corresponding figures for the same quarter last year were MNOK 162 and NOK 25.51.
“Covid-19 had a significant impact on the world in the first quarter and has put us all to the test,” says CEO Charles Høstlund.
“Our world is facing some formidable challenges and the need for healthy, environmentally friendly seafood will be important in the future. We are very pleased that none of our employees have been diagnosed with the virus and that Covid-19 has not affected production so far. As a result of winter wounds, harvest from a zone with restrictions and the timing of harvest, the quarter was influenced by reduced price achievement and increased production costs. That the Group’s growth initiative on Iceland, Arctic Fish, achieved an operating EBIT of MNOK 16 and an operating EBIT per kg of NOK 18.47 in the quarter is very satisfactory.”
NRS has a strong financial position with MNOK 1 840 in unutilised credit facilities and MNOK 58 in bank deposits at the end of the first quarter of 2020. Payments for the growth investments in Arctic Offshore Farming, the new smolt facility and acquisition of 289 tonnes of MAB have resulted in an increase in net interest-bearing debt during the quarter to MNOK 283. The equity at the end of the quarter is MNOK 3 382, which equates an equity ratio of 72 %.
Farming posted an operational EBIT of MNOK 89.4 in the quarter, compared with MNOK 179.0 in the corresponding quarter last year. Operational EBIT per kg gutted weight was NOK 16.53 compared with NOK 25.51 in the corresponding quarter last year.
NRS harvested 5 409 tonnes gutted weight in the quarter, which is 23 % lower than in the same quarter last year. Estimated harvest volume for 2020 is 37 000 tonnes, an increase of 36 % compared with the volume harvested in 2019. Sold volume from the sales business in the quarter was 17 900 tonnes salmon, which is 22 % lower than in the corresponding quarter last year.
“In the first quarter, NRS purchased available capacity through the authorities’ traffic light system in Norway and now owns 35 035 tonnes of MAB. NRS shall grow through sustainable growth and the Group has 38 % higher biomass in the sea at the end of the quarter compared to the same quarter last year. With our ambitions for sustainable growth, we want to increase our capacity with both existing and extended licenses,” says Charles Høstlund.