SalMar – Delivering strong quarterly results and reaching significant milestones in execution of growth strategy. Limited supply of Atlantic salmon, coupled with robust demand, led to another quarter with high salmon prices, and in turn strong quarterly results.
- Operational EBIT for the group was NOK 1,745 million in Q2 2023. Total harvest was 44,300 tonnes. Operational EBIT per kg was NOK 39.4. Operational EBIT for Norway alone was NOK 1,790 million and operational EBIT per kg was NOK 40.5.
- The Fish Farming Central Norway segment continued its solid operational performance, partly offset by cost levels being impacted by one-off costs. Fish Farming Northern Norway reported strong quarterly results with lower cost level.
- Sales and Industry continued its solid operational performance, demonstrated by its efficient management of harvesting and processing facilities and good disposal of volume to the market. The contract share was 25 per cent, with negative contribution.
- As anticipated, Icelandic Salmon harvested limited volume during the second quarter 2023 in order to optimize biological performance.
- SalMar Aker Ocean’s Ocean Farm 1 started its third production cycle early May 2023 and expect harvest early 2024, according to plan.
- For Scottish Sea Farms, the results were weak, affected by biological challenges.
- SalMar keeps its volume guiding for 2023 in Norway and Iceland unchanged. The volume guidance for 2023 for Scottish Sea Farms is reduced to 27,000 tonnes.
- Resource rent tax in Norway has been included with a material implementation effect.
In the first half of 2023, following successful transactions and ongoing integration of NTS, NRS and SalmoNor, SalMar has taken significant steps to further fortify its position as a leading producer of sustainable salmon.
- Arctic Offshore Farming started production July and with Ocean Farm 1 two offshore facilities are in operation.
- SalMar is also increasing its smolt capacity with first batch of roe being installed at the new smolt facility, Tjuin, during the summer.
- In August, Goldman Sachs Asset Management completed the acquisition of 72.11 per cent of the shares in Frøy ASA from NTS, SalMar’s wholly owned subsidiary, for NOK 4.8 billion in cash consideration.
- Also in August, SalMar further strengthened its balance sheet and financial flexibility by entering unsecured credit facilities agreement, totalling NOK 16 billion.
- Board of SalMar propose to cancel 13.1 million treasury shares. Notice to extraordinary general meeting will be sent at a later point of time.
Comments
As one of the world’s leading producers of Atlantic Salmon, it is no coincident that SalMar presents its report for the second quarter and first half of 2023 at Aqua Nor, the international aquaculture conference in Trondheim, Norway, today.
“We are reporting strong performance, largely in with our expectations, and good progress in our ongoing efforts to integrate business from NRS, NTS and SalmoNor. We have recently signed a refinancing agreement at competitive terms and strengthened our balance sheet through the sale of shares in Frøy, thereby creating an even stronger foundation for further growth,” said Frode Arntsen, CEO of SalMar.
Over the past few years, the company has made significant investments along its entire value chain. SalMar operates innovative RAS smolt facilities, coastal farming units, offshore units and has several state-of-the-art plants onshore for harvesting and processing of salmon.
“We clearly state our ambition to continue to grow sustainably and create value for society and for our shareholders. How soon and how much depends to a large degree on the effects of the resource rent tax which has been introduced in Norway. According to our preliminary calculations, the implementation effect alone amounts to NOK 2,3 billion,” Mr. Arntsen said.
SalMar strongly opposes the resource rent tax model and level, and believes the arguments outlined in the company’s consultation response in January 2023 still holds. The company will continue to argue for a review of the tax system and tax level for Norwegian aquaculture through close and fact-based dialogue with authorities and decision-makers. SalMar is open to legal steps in due course.
Outlook
SalMar keeps volume guidance for 2023 unchanged at 243,000 tonnes in Norway and 16,000 tonnes in Iceland. For Scottish Sea Farms the volume guidance is reduced to 27,000 tonnes.
In Norway, SalMar expects significantly higher volume and similar cost level in the third quarter 2023 compared to the second quarter 2023. And also higher volume in Iceland.
For the third quarter 2023, the contract rate in Norway is expected to be around 15 per cent. For the full year of 2023, it is expected to be 16 per cent.
SalMar’s CEO Frode Arntsen and CFO Ulrik Steinvik will present the company’s results at Aqua Nor today at 9am CEST, in the Mendelsohn conference room in Trondheim Spektrum. The presentation will also be available on webcast on www.salmar.no.
Image credit: SalMar