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SalMar ASA
Quarterly Report • Nov 18, 2024
3731_rns_2024-11-18_f2212a4d-8917-44cd-af54-aaacf1af846c.pdf
Quarterly Report
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Highlights in the third quarter
- Operational EBIT for Norway1 ended at NOK 1,082 million for the third quarter. Harvest volume was 56,400 tonnes and operational EBIT per kg was NOK 19.2.
- Operational EBIT the Group was NOK 1,041 million for the third quarter. Harvest volume was 60,300 tonnes and operational EBIT per kg was NOK 17.3.
- Farming segments in Norway affected by biological challenges impacting results in the period and volume expectations for 2024 is reduced.
- Sales and Industry with a historic strong result where the effective and flexible operational set-up together with the contract share has a positive effect to the results.
- SalMar Aker Ocean with harvest of remaining volume in 2024 and new production cycles at both Ocean Farm 1 and Arctic Offshore Farming is well underway, with expected harvest in 2025.
- Icelandic Salmon continue to be affected low volume and high cost.
- Scottish Sea Farms with continued good performance with increased volume, higher average weight and good biological status in sea in all regions.
- Strengthening presence in Norway through acquisition of controlling interest in AS Knutshaugfisk and increasing ownership in farming subsidiaries.
- Volume guidance for FY 2024 reduced. The harvest guidance for Norway is 217,000 tonnes, SalMar Aker Ocean 6,900 tonnes, Iceland 13,000 tonnes and 40,000 tonnes in Scotland (100% basis).
- Expect increased volume in FY 2025. The harvest guidance for Norway is 254,000 tonnes, SalMar Aker Ocean 9,000 tonnes, Iceland 15,000 tonnes and 32,000 tonnes in Scotland (100% basis).
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Operating revenues | 6,158 | 7,512 | 18,550 | 20,199 | 28,219 |
| Operational EBIT | 1,041 | 2,289 | 3,940 | 5,966 | 8,159 |
| Production tax | -60 | -73 | -159 | -130 | -208 |
| Fair value adjustments & onerous contracts |
273 | 424 | 260 | 1,434 | 630 |
| Income from investments in associates and joint ventures |
-20 | -18 | 84 | -62 | -27 |
| Profit before tax from continuing operations |
839 | 2,304 | 3,290 | 6,305 | 7,279 |
| EPS - Adjusted | 2.8 | 8.5 | 15.2 | 26.9 | 39.1 |
| NIBD incl. lease liabilities | 19,720 | 15,722 | 19,720 | 15,722 | 14,952 |
| Equity ratio (%) | 35.4 % | 40.3 % | 35.4 % | 40.3 % | 43.3 % |
| Harvest volume (1,000 tons gw) | 60.3 | 78.1 | 158.0 | 171.0 | 254.1 |
| EBIT/kg (NOK) | 17.3 | 29.3 | 24.9 | 34.9 | 32.1 |
1 Results from Norway are group results excluding segments SalMar Aker Ocean and Icelandic Salmon.
Financial performance
Summary
Farming segments in Norway continued to face challenges where ripple effects from string jellyfish, record high sea temperatures and high sea lice pressure has impacted the biological performance in the period.
In Sales and Industry the operational set-up of its facilities continued to show flexibility to handle volume from challenges in farming segments, and due to lower spot prices there was a positive contribution from contracts.
Icelandic Salmon with weak results due to low volume harvested and high cost.
SalMar Aker Ocean harvested remaining volume in 2024 and both semi-offshore projects are in operation for harvest in 2025.
In the third quarter 2024, the SalMar Group harvested tonnes 60,300 of salmon in total, down from 78,100 tonnes in the third quarter 2023.
The Norskott Havbruk joint venture (Scottish Sea Farms) reported good results and biological status in seawater in all regions.
In the third quarter 2024, the price of salmon (SISALMON/ NQSALMON Index) averaged NOK 71.3 per kg down from NOK 78.3 per kg in the third quarter in 2023.
Income statement for the third quarter 2024
Operating revenues amounted to NOK 6,158 million in the third quarter 2024, compared with NOK 7,512 million in the third quarter 2023.
SalMar's most important key performance indicator is operational EBIT, an alternative performance measure, see note 12 for further details. This shows the result of the Group's underlying operations during the period. Specific items not associated with underlying operations are presented on separate lines.
The SalMar Group achieved an operational EBIT of NOK 1,041 million in the quarter, compared to NOK 2,289 million in the corresponding quarter the year before.
The SalMar Group achieved an operational EBIT per kg of NOK 17.3 in the third quarter 2024, down from NOK 29.3 per kg in the third quarter 2023.
From 1 January 2024 the production tax in Norway increased to NOK 0.935 per kg, see note 8 for further details. The production tax in Norway and the resource tax in Iceland amounted to NOK -60 million in the third quarter 2024. In the same period in 2023, this amounted to NOK -73 million.
Write-downs of tangible and intangible non-current assets amounted to NOK -9 milion, litigation and legal claims was NOK -5 million and restructuring cost was NOK -61 million.
The change in provisions for onerous contracts was NOK 16 million in the quarter and the fair value adjustment was NOK 257 million in the quarter. See Note 4 for further details.
SalMar posted an operating profit of NOK 1,178 million in the third quarter 2024, compared to NOK 2,651 million in the same period in 2023.
Income from investments in associates and joint ventures was NOK -20 million in the period, compared with NOK -18 million in the corresponding quarter in 2023. See note 5 for further details.
Net interest expenses totalled NOK -311 million in the third quarter 2024, compared with NOK -338 million in the corresponding quarter last year.
Other financial items were NOK -8 million in the period, compared with NOK 9 million in the third quarter 2023.
Profit before tax in the third quarter 2024 was NOK 839 million, compared with NOK 2,304 million in the corresponding quarter last year. A tax expense of NOK 579 million has been recognised for the quarter. This amount includes calculated resource rent tax, see note 8 for further details.
The profit after tax from discontinued operations was NOK 0 million, resulting in a profit for the period of NOK 260 million. The tax expense recognised in the corresponding quarter last year was NOK 1,623 million, while profit for the period last year totalled NOK 1,066 million.
Currency exchange effects through the quarter resulted in translation differences of NOK 135 million with respect to associates and subsidiaries. Change in fair value of financial instruments net after tax was negative NOK -86 million. This resulted in a total other comprehensive income of NOK 49 million in the quarter. These are items that may subsequently be reclassified to profit and loss and increase the period's total comprehensive income to NOK 309 million.
Income statement for the first nine months of 2024
The SalMar Group generated gross operating revenues of NOK 18,550 million in the first nine months of 2024, down from NOK 20,199 million in the first nine months of 2023.
The harvest volume for the first nine months of 2024 was 158,000 tonnes. In 2023, the Group harvested 171,000 tonnes.
Operational EBIT for the first nine months of 2024 totalled NOK 3,940 million, down from NOK 5,966 million in 2023. This gives an Operational EBIT per kg of NOK 24.9 for the first nine months of 2024, compared with NOK 34.9 in 2023.
The production tax in Norway and the resource tax in Iceland amounted to NOK -159 million in total in the first nine months of 2024.
Write-downs of tangible and intangible non-current assets amounted to NOK -9 milion, litigation and legal claims was NOK -29 million and restructuring cost was NOK -32 million.
Onerous contracts was NOK 337 million, the fair value adjustment was NOK 13 million in the first nine months of 2024.
Operating profit for the first nine months of 2024 ended at NOK 3,970 million, down from NOK 7,234 million in the first nine months of 2023.
Income from associates and joint ventures was NOK 84 million in the first nine months of 2024. The contribution is primarily a result of SalMar's share of the profit from Norskott Havbruk. In the first nine months of 2023, associates and joint ventures contributed NOK -62 million.
Net interest expenses totalled NOK -789 million in the first nine months of 2024, compared with NOK -887 million in the same period last year. Net other financial items totalled NOK 25 million in the period. In the corresponding period last year, the Group reported other financial items totalling NOK 20 million.
Profit before tax in the first nine months of 2024 therefore totalled NOK 3,290 million, compared with NOK 6,305 million in the same period last year. A tax expense of NOK 1,235 million has been calculated for the first nine months of 2024, compared to NOK 4,819 million in the same period in 2023. The amount for 2023 includes implementation effect for the resource rent tax. See note 8 for further information.
Other comprehensive income totalled NOK -124 million for the first nine months of 2024 where translation differences in associates and joint ventures and subsidiaries was NOK 200 million and change in fair value of financial instruments net after tax was NOK -324 million. These are items that may subsequently be reclassified to profit and loss and decrease the period's total comprehensive income to NOK 1,932 million in the first nine months of 2024.
Cash flow
Cash flow from operating activities for the SalMar Group was NOK 1,086 million in the third quarter 2024, compared with NOK 2,977 million in the same period in 2023.
Net cash flow from investing activities in the third quarter totalled NOK -885 million, compared with NOK 3,916 million in the third quarter last year.
Investments in the value chain in the quarter related to purchase and sale of property, plant and equipment, licenses and other non-current assets was NOK -1,018 million.
The Group had a net cash flow from financing activities of NOK -350 million in the third quarter 2024, compared with NOK -7,297 million in the same period last year.
During the quarter the Group's interest-bearing liabilities increased with NOK 994 million, instalments on lease liabilities and net interest paid totalled NOK -407 million.
In the same quarter last year, interest-bearing liabilities increased with NOK -6,725 million, while instalments on leasing liabilities and net interest paid totalled NOK -516 million.
SalMar had a net change in cash and cash equivalents of NOK -149 million in the third quarter 2024, compared with NOK -404 million in the same period in 2023. Adjusted for NOK 13 million in currency effects, cash holding at the close of the quarter stood at NOK 490 million.
Financial position
At the end of the third quarter 2024, SalMar Group's assets totalled NOK 54,961 million, compared to NOK 52,867 million at the end of the second quarter 2024.
Non-current assets amounted to NOK 36,789 million at the end of third quarter 2024, up from NOK 36,222 million at the end of the second quarter 2024.
Non-current intangible assets totalled NOK 19,494 million at the end of the quarter, up from NOK 18,805 million at the end of the second quarter 2024.
The book value of the Group's non-current tangible assets was NOK 12,763 million at the close of the quarter, up from NOK 12,689 million at the end of the second quarter 2024.
The Group's right-of-use assets totalled NOK 1,707 million, down from NOK 1,788 million at the end of the second quarter 2024.
Non-current financial assets was NOK 2,825 million, down from NOK 2,940 million at the end of the second quarter 2024.
At the end of the third quarter 2024, SalMar had current assets totalling NOK 18,172 million, up from NOK 16,645 million at the end of the second quarter 2024.
The book value of inventory stood at NOK 1,347 million at the end of third quarter 2024, up from NOK 1,091 million at the end of the second quarter 2024. Biological assets totalled NOK 14,383 million, up from NOK 13,111 million at the end of the second quarter 2024. Trade receivables totalled NOK 1,207 million, up from NOK 1,184 million at the end of the previous quarter. Other current receivables were NOK 745 million, up from NOK 631 million at the end of the second quarter 2024.
As of 30 September 2024, the SalMar Group had cash and cash equivalents of NOK 490 million, down from NOK 627 million at the end of the second quarter 2024.
As of 30 September 2024, the Group's total equity amounted to NOK 19,476 million, corresponding to an equity ratio of 35.4%, compared to NOK 20,085 million at the end of the second quarter 2024 and an equity ratio of 38.0%. For further details, reference is made to the attached separate presentation of movements in equity.
As of end of the third quarter 2024, the SalMar Group had total interest-bearing liabilities of NOK 18,436 million. Of this amount, non-current interest-bearing liabilities amounted to NOK 15,667 million, while current interest-bearing liabilities was NOK 2,768 million. By comparison, total interest-bearing liabilities at the end of the second quarter 2024 was NOK 17,419 million. See notes to the financial statements for further details.
The Group's lease liabilities totalled NOK 1,774 million at the close of the third quarter 2024, compared to NOK 1,855 million at the end of the second quarter 2024.
At the end of the third quarter 2024, deferred tax liability, trade creditors and other non-current and current liabilities totalled NOK 15,275 million, compared to NOK 13,509 million at the end of the previous quarter.
As of 30 September 2024, the SalMar Group had net interestbearing debts, including lease liabilities of NOK 19,720 million, compared to NOK 18,646 million at the end of the second quarter 2024.
Operational performance
SalMar reports its operations in five segments: Fish Farming Central Norway, Fish Farming Northern Norway, Icelandic Salmon, Sales and Industry and SalMar Aker Ocean.
Fish Farming Central Norway
Fish Farming Central Norway is SalMar's largest segment. It encompasses the Group's operations in the Møre og Romsdal and Trøndelag counties, production area 5-7.
| NOK million | Q3 2024 | Q3 2023 YTD 2024 YTD 2023 | ||
|---|---|---|---|---|
| Operating revenues | 2,732 | 3,817 | 8,174 | 8,996 |
| Operational EBIT | 483 | 1,202 | 2,780 | 3,419 |
| Operational EBIT (%) | 18 % | 31 % | 34 % | 38 % |
| Harvest volume (1,000 tgw) |
38.2 | 48.4 | 93.1 | 98.9 |
| EBIT/ kg gw (NOK) | 12.7 | 24.9 | 29.9 | 34.6 |
Fish Farming Central Norway harvested 38,200 tonnes of salmon in the third quarter 2024, compared with 48,400 tonnes in the third quarter 2023.
The segment generated operating revenues of NOK 2,732 million in the quarter, compared with NOK 3,817 million in the corresponding quarter last year.
The EBIT per kg gutted weight was NOK 12.7 in the third quarter 2024, compared to NOK 24.9 per kg in the same period last year.
The majority of the volume harvested in the quarter originated from fish that were transferred to sea in the spring 2023 where harvesting of the generation ended in the quarter. In addition harvest from the autumn 2023 generation started.
The results are affected by challenges where record high sea temperatures has affected growth, high sea lice pressure in the beginning of the period and early harvest due to ISA in PO6 has negatively affected the results.
In the fourth quarter sporadic cases of string jellyfish has been observed in PO6. SalMar has increased its prepardness to mitigate any negative effects from the incidents and to safeguard fish welfare.
Despite still some challenges, the overall biological status on the fish in sea is satisfactory. The segment expects similar cost level in the fourth quarter 2024 compared to the third quarter 2024, dependent on the biological performance in the period.
Due to the challenges experience during 2024 the volume guidance for 2024 is reduced to 135,000 tonnes down 11,000 tonnes. In 2025 the segment expects to harvest 154,000 tonnes.
Fish Farming Northern Norway
Fish Farming Northern Norway encompasses the Group's operations in Troms and Finnmark county, production area 10-13.
| NOK million | Q3 2024 | Q3 2023 YTD 2024 YTD 2023 | ||
|---|---|---|---|---|
| Operating revenues | 1,246 | 2,033 | 4,148 | 5,458 |
| Operational EBIT | 190 | 868 | 1,174 | 2,562 |
| Operational EBIT (%) | 15 % | 43 % | 28 % | 47 % |
| Harvest volume (1,000 tgw) |
18.3 | 25.7 | 52.8 | 61.4 |
| EBIT/ kg gw (NOK) | 10.4 | 33.8 | 22.2 | 41.7 |
Fish Farming Northern Norway harvested 18,300 tonnes in the third quarter 2024, compared with 25,700 tonnes in the third quarter 2023.
The segment generated operating income of NOK 1,246 million in the quarter, compared with NOK 2,033 million in the corresponding quarter last year.
The segment achieved NOK 10.4 EBIT per kg gutted weight in the third quarter 2024, compared to NOK 33.8 per kg in the same period last year.
The majority of the volume harvested in the quarter originated from fish that were transferred to sea in the autumn 2022 in addition volume originated from the spring 2023 generation. At the end of the period some volume from the autumn 2023 generation was also harvested.
The results are affected by challenges where ripple effects from string jellyfish, record high sea temperatures has affected growth in PO10, high sea lice pressure at the end of the period and low average weight of the volume harvested in september has negatively affected the results.
The overall biological status on the fish in sea is good. The segment expects slightly lower cost level in the fourth quarter 2024, compared to the level in third quarter 2024
Due to the challenges experience during 2024 the volume guidance for 2024 is reduced to 82,000 tonnes a reduction of 9,000 tons. In 2025 the segment expects to harvest 100,000 tonnes.
Sales and Industry
The Sales and Industry segment sells all fish that the Group harvests in Norway. The harvested volume is sold primarily to markets in Europe, Asia, and America. The harvesting and secondary processing plants are InnovaMar and Vikenco in Central Norway, and InnovaNor in Northern Norway.
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 YTD 2023 | |
|---|---|---|---|---|
| Operating revenues | 6,150 | 7,236 | 18,459 | 19,477 |
| Operational EBIT | 464 | 236 | 337 | 88 |
| Operational EBIT (%) | 7.5 % | 3.3 % | 1.8 % | 0.5 % |
Sales and Industry generated gross operating revenues of NOK 6,150 million in the third quarter 2024, compared with NOK 7,236 million in the corresponding period in the year before.
In total the segment harvested 53,800 tonnes of salmon in the third quarter 2024, compared with 56,700 tonnes in the same period last year.
The segment delivered an operational EBIT of NOK 464 million in the period, compared with NOK 236 million in the same period last year.
A strong result in the period with strong capacity utilization. The segment continued to showcase its flexible operational set-up being able to handle volumes from challenges at the farming sites.
The fixed price contract shares in the period was 37% per cent, with positive contribution due to lower spot prices. The segment reported continued good price achievement from spot sales.
In the fourth quarter 2024, the contract rate is expected to be around 28 per cent. For the full year of 2024, the contract rate is expected to be around 36 per cent.
SalMar Aker Ocean
SalMar Aker Ocean is a partnership between SalMar (85 per cent ownership) and Aker (15 per cent) that specialise in offshore farming. The company has two semi-offshore units in operation, Ocean Farm 1 in Central Norway and Arctic Offshore Farming in Northern Norway.
| NOK million | Q3 2024 | Q3 2023 YTD 2024 YTD 2023 | ||
|---|---|---|---|---|
| Operating revenues | 146 | 0 | 574 | 0 |
| Operational EBIT | -7 | -8 | -65 | -63 |
| Operational EBIT (%) | -5 % | -11 % | ||
| Harvest volume (1,000 tgw) |
2.1 | 0.0 | 6.9 | 0.0 |
| EBIT/ kg gw (NOK) | -3.2 | -9.5 |
In the third quarter 2024, SalMar Aker Ocean reported operating revenues of NOK 146 million and operational EBIT of NOK -7 million. EBIT per kg came in at NOK -3.2.
Remaining volume in 2024 was harvested in the period where the volume harvested originated from a farming site operated in cooperation with Fish Farming Central Norway.
The segment has both semi-offshore units in operation after transfer of smolt to Ocean Farm 1 in Q2 2024 and Arctic Offshore Farming in Q3 2024, where both units are planned to be harvested in 2025. Biological status is good at both sites.
Strong biological performance from last production cycles with low mortality, strong growth and few sea lice treatments give confidence in future potential. Ongoing work for international expansion is progressing according to plan.
In 2025 the segment expect to harvest 9,000 tonnes.
Icelandic Salmon
Icelandic Salmon is Iceland's largest producer and processor of farmed salmon. The company is vertically integrated, with its own hatchery, sea farms, harvesting plant and sales force.
| NOK million | Q3 2024 | Q3 2023 YTD 2024 YTD 2023 | ||
|---|---|---|---|---|
| Operating revenues | 169 | 476 | 596 | 1,267 |
| Operational EBIT | -35 | 35 | -84 | 204 |
| Operational EBIT (%) | -21 % | 7 % | -14 % | 16 % |
| Harvest volume (1,000 tgw) |
1.8 | 4.0 | 5.2 | 10.7 |
| EBIT/ kg gw (NOK) | -20.0 | 8.7 | -16.2 | 19.1 |
Icelandic Salmon harvested 1,800 tonnes in the third quarter 2024. The business generated operating revenues of NOK 169 million in the third quarter 2024, compared to NOK 476 million in the same period in 2023.
Operational EBIT per kg in the quarter was NOK -20.0 per kg, in comparison to NOK 8.7 per kg in the same period last year.
Low harvest in the period in order to build biomass and optimize MAB utilizaion and the result is negatively affected by the low volume and high cost base of fish harvested.
The 2022 generation accounted for the harvest volume in the quarter. And there has been a stable biology during the period.
The cost level in the fourth quarter is expected to be slightly lower and the volume guidance for 2024 is kept unchanged at 13,000 tonnes.
In 2025 the segment expect to harvest 15,000 tonnes.
Eliminations
Research and development (R&D) costs are included as eliminations in the segments' reported results. Of a total harvested volume of 60,300 tonnes in the third quarter 2024, R&D costs accounted for NOK 0.5 per kg.
Joint venture – Scottish Sea Farms
Norskott Havbruk (Scottish Sea Farms) is accounted for as a joint venture, with SalMar's share (50 per cent) of the company's profit/loss after tax (and fair value adjustment of the biomass) being included as financial income. The figures in the table below reflect the company's performance on a hundred percent basis.
| NOK million | Q3 2024 | Q3 2023 YTD 2024 YTD 2023 | ||
|---|---|---|---|---|
| Operating revenue | 1,176 | 867 | 3,438 | 2,065 |
| Operational EBIT | 90 | -121 | 462 | -257 |
| Operational EBIT (%) | 8 % | -14 % | 13 % | -12 % |
| Harvest volume (1,000 tgw) |
11.9 | 8.8 | 31.4 | 20.3 |
| EBIT/kg | 7.6 | -13.7 | 14.7 | -12.6 |
| Fair value adj. biomass | -6 | 27 | 31 | 21 |
| Profit/loss before tax | -29 | -147 | 265 | -381 |
| SalMar's share after tax | -16 | -55 | 78 | -150 |
| NIBD | 2,665 | 2,700 | 2,665 | 2,700 |
Scottish Sea Farms harvested 11,900 tonnes in the third quarter 2024, compared with 8,800 tonnes harvested in the same period last year.
The company generated operating revenues of NOK 1,176 million in the third quarter 2024, compared with NOK 867 million in the corresponding quarter last year. 32 per cent of the volume was sold on contracts with positive contribution.
EBIT per kg gutted weight was NOK 7.6 in the period, an increase from NOK -13.7 per kg in the corresponding period last year.
SalMar's share of Norskott Havbruk's net profit was NOK -16 million in the third quarter 2024.
Scottish Sea Farm continued its positive trajectory seen last quarters with increased harvest volumes, good harvest weights, and good biological conditions in seawater in all regions. The company reports of good biological situation with next generations of fish performing well in all regions.
Volume guidance for 2024 is increased with 3,000 tonnes to 40,000 tonnes due to strong performance in 2024.
Volume guidance for 2025 is 32,000 tonnes.
Markets
Supply and biomass
In the third quarter 2024, the global supply of Atlantic salmon totalled approximately 798,800 tonnes, an increase of 5 per cent on the same period in 2023.
At 440,300 tonnes, output in Norway was 7 per cent higher than in the same period a year before. The output decreased with 2 per cent in Chile and 10 per cent in North America. The output increased with 10 per cent in UK, 41 per cent in the Faroe Islands and 5 per cent in other regions.
According to figures from Kontali, the standing biomass in Norway at the end of third quarter 2024 is estimated to be 1 per cent lower than at the same time the year before. The standing biomass is estimated to be 2 per cent higher in Chile, 10 per cent higher in the UK, and 6 per cent lower in the Faroe Islands.
Prices and foreign exchange rates
SISALMON/NQSALMON Index was traded at NOK 73.0 per kg at the start of the third quarter 2024. At the end of the quarter, it was traded at a price of NOK 62.1 per kg. The SISALMON/NQSALMON Index in the period averaged NOK 71.3 per kg in the third quarter 2024, down from NOK 78.3 per kg in the third quarter 2023.
Against the most important trading currencies for salmon the Norwegian krone (NOK) weakened 3.2 per cent against EUR, strenghtened 1.3 per cent against the USD, and weakened 4.6 per cent against the GBP through the quarter.
Norwegian exports
Norwegian export of salmon was around 424,600 tonnes (round weight) in the third quarter 2024, up 8 per cent from 393,200 tonnes in the same period last year. The value of these exports increased by 3 per cent year-on-year, from NOK 30.5 billion to NOK 31.4 billion.
A substantial secondary processing industry makes Poland the largest single market for Norwegian salmon. In the third quarter 2024, around 73,000 tonnes of salmon in total were exported to this market, a 2 per cent increase from the corresponding quarter in 2023.
Compared to the third quarter 2023 exports increased by 11 per cent to Denmark, 7 per cent to France and 4 per cent to Spain. The export fell with 5 per cent to Netherlands.
As of 30 September 2024, SalMar had a total of 132,038,920 shares outstanding, divided between 21,303 shareholders.
The company's largest shareholder, Kverva Industrier AS, owned 45.4 per cent of the shares at the end the quarter. The 20 largest shareholders owned a total of 66.5 per cent of the shares.
As of 30 September 2024, SalMar ASA owned 270,306 treasury shares. This corresponds to 0.2 per cent of the total number of shares outstanding as of 30 September 2024.
SalMar's share price fluctuated between NOK 524.0 and NOK 641.0 in the third quarter 2024. The price at the close of the quarter was NOK 553.5 compared with NOK 562.0 at the close of the previous quarter.
A total of 9.7 million shares were traded in the quarter, which corresponds to 7.3 per cent of the total number of shares outstanding. The volume of shares traded daily averaged 147,000.
Other matters
Strengthening cost focus in the value chain
After a strategic period of focus on realising synergies from the integration of NTS, NRS and SalmoNor into SalMar, SalMar has successfully achieved its annual recurring cost savings.
At the start of 2024, SalMar started a new strategic period to further strengthen its cost focus in operations. Salmon farming is about attention to detail, and the goal of this strategic period is to optimize the cost base and biological performance in all regions, targeting elements where SalMar can make the most impact.
Launch of Salmon Living Lab
In March 2024, SalMar launched Salmon Living Lab, an ambitious innovation and R&D initiative together with Cargill, a global food corporation and aquaculture feed supplier. With the initiative, the parties aim to motivate and mobilise a broad industry initiative to finding and developing more sustainable solutions for salmon farming, on the terms of the salmon. Salmon Living Lab will serve as an innovation centre dedicated to improving the biology across the entire salmon farming value chain. Initial investments in Salmon Living Lab are estimated at NOK 500 million.
The initiative has received significant interest from a large number of companies in the value chain, NGOs and other stakeholder groups, which are eager to contribute.
Kristine Hartmann, currently the Development Director in Salmar Aker Ocean, was appointed CEO of Salmon Living Lab in August 2024.
For more information, see www.salmonlivinglab.no
Expansion of smolt production capacity
The new smolt facility in Tjuin in Trøndelag, came into operation in 2023 and the the first batch of fish to sea was delivered in the second quarter 2024.
In 2023, SalMar completed the construction of its second closed net pen, Marine Donut, in Central Norway, Romsdalsfjorden. This is SalMar's second closed net pen in the region. First production started in second quarter 2024.
Expanding harvesting and processing capacity
The Vikenco project is on track and will expand harvesting capacity and VAP capacity at SalMar's facility Vikenco in Rindarøy outside Molde in Central Norway.
The expansion project at InnovaMar, InnovaMar 2.0 at Frøya, aimed at doubling capacity and generating significant local ripple effects, is currently postponed due to uncertainty regarding the resource rent tax and offshore farming regulations.
New offshore units on hold in Norway
In end September 2023, site approval for one open ocean unit was granted to SalMar Aker Ocean's Smart Fish Farm, approximately 50 nautical miles west of Frøya in Central Norway. Due to regulatory uncertainty SalMar Aker Ocean decided that further work on offshore aquaculture in Norway is currently on hold. The company will continue to fully focus on growth semi-offshore and utilize the capacity of its existing two semi-offshore units for the production of sustainable Norwegian salmon. It will also continue to explore opportunities outside of Norway.
Resource rent tax on aquaculture in Norway
On 31 May 2023, with a narrow majority, the Norwegian Parliament voted for implementing an additional resource tax on aquaculture in Norway, with a tax rate of 25 per cent. This is in addition to the regular corporate tax and means that the marginal tax rate on aquaculture will increase by over 100 per cent, from 22 per cent to 47 per cent. The new tax applied retroactively from January 1, 2023.
SalMar remains strongly opposed to this the resource rent tax and has consistently cautioned against it. The tax relies on the incorrect assumption that aquaculture food production is a location-bound resource rent industry that consistently generates extraordinary returns disproportionate to the risk involved.
The high tax level and the unfavourable design of the new tax are poised to withdraw a substantial portion of investment capital from the industry. Therefore, SalMar will continue its close and fact-based dialogue with authorities and decision-makers to promptly restoring a tax system and tax level that is appropriate for Norwegian aquaculture. SalMar is open to legal steps in due course.
Changes in the regulatory framework for aquaculture in Iceland
In December 2023, a bill was presented by the Icelandic government which could lead to changes in the regulatory framework for the country's aquaculture sector.
The aim of the proposed changes is to increase the value of Iceland's aquaculture sector, while do it in a sustainable way. The proposal has not yet been approved in law by Parliament.
Icelandic Salmon 10,000 tonnes MAB in additional licenses revoked
In June 2024, Arnarlax, fully owned by Icelandic Salmon, was awarded licenses for a total of 10,000 tonnes MAB of sterile salmon, across three new sites in Ísafjarðardjúp.
In the fourth quarter 2024 the Environmental and Natural Resources Board of Appeal has ruled that the Icelandic Food and Veterinary Authority (MAST) did not provide a comprehensive, weighted assessment of the potential increased risk of the spread of fish diseases and parasites before issuing the license.
Arnarlax will work with authorities and MAST on these matters and perform the necessary assessment in order for the license to be reissued.
Statement of Objections from the European Commission
25 January 2024, the European Commission sent a Statement of Objections to SalMar and other Norwegian salmon producers for potential breach of EU competition rules. For SalMar, the case commenced upon the Commission's inspection at Scottish Sea Farms Ltd. on 19 February 2019. SalMar has cooperated with the Commission throughout the entire case.
The Commission's preliminary assessment suggest a potential breach of EU competition law in the period 2011-2019, related to spot sales of fresh, whole salmon to EU from Norway. However, the Commission has not concluded in the case, and the issuance of the Statement of Objections does not determine the outcome of the investigation.
SalMar strongly disagrees with the Commission's preliminary assessment and provided a comprehensive response in June 2024.
Aquired MAB capacity at traffic light auction
Norway has a "traffic-light system" which regulates aquaculture growth, while also ensuring environmental sustainability and predictability. The system divides the country into 13 production regions, where each region receives a green, yellow, or red designation indicating expansion permissions. Green regions allow growth in production, yellow regions can keep stable production, while red regions must halt production or reduce it. The assessment is done every second year.
SalMar holds production licenses in the green regions PO10-13 and in the yellow regions PO5-PO7. In line with the framework, SalMar purchased its relative share of allowed growth relating to existing licenses at fixed price of NOK 170,000 per ton and participated in the auction round in June, in total 3,078 tonnes where purchased.
Events after the reporting date
In the fourth quarter 2024 SalMar strengthened its presence in Norway through acquisition of controlling interest in AS Knutshaugfisk and acquisition of remaining ownership in the subsidiary Hitramat Farming AS. In addition ownership in Osan Settefisk AS was sold. Please see notes in the report for further details.
Outlook
In 2024 it is expected limited global growth in supply for Atlantic salmon. According to figures from Kontali Analyse the global supply is expected to increase with 1.2 per cent from levels in 2023. In 2025 Kontali Analyse also expects low volume growth with global supply expecting to increase with 4.6 per cent.
In the fourth quarter 2024, the global volume of salmon harvested is expected to be 3.0 per cent higher than the level in than the fourth quarter 2023, according to Kontali.
Compared with the same period last year, the harvested volume in the fourth quarter 2024 is expected to increase with 4.2 per cent in Norway, 0.2 per cent in Chile, 26 per cent in UK and 12 per cent in other regions. Harvest volume is expected to decrease with 18.5 per cent in North America and 9.3 per cent in the Faroe Islands.
The Euronext European Salmon Futures as of 11 November 2024 indicates an average salmon price of EUR 6.45 per kg and EUR 7.03 per kg in November and December 2024, respectively. The forward price for 2025 is currently at EUR 8.2 per kg.
Harvest guidance 2024 and beyond
The volume guidance in FY 2024 is 217,000 tonnes in Norway, 6,900 tonnes from SalMar Aker Ocean, 13,000 tonnes in Iceland and 40,000 tonnes in Scotland (100% basis)
Volume growth is expected in FY 2025 with harvest guidance of 254,000 tonnes in Norway, 9,000 tonnes in SalMar Aker Ocean, 15,000 tonnes in Iceland and 32,000 tonnes in Scotland (100% basis).
SalMar has identified substantial untapped organic growth potential within existing value chain. Despite challenges in 2024, the volume potential is unchanged and increased following the aquisitions in new capacity in 2024.
The volume potential in Norway is estimated at 308,000 tonnes, SalMar Aker 13,000 tonnes, Iceland 26,000 tonnes and Scottish Sea Farms 45,000 tonnes (100% basis). Overall, this implies a total volume projection for the SalMar group of 370,000 tonnes, including relative share from Scottish Sea Farms.
Overall ambitions
SalMar has a positive view on the future of the aquaculture industry. The company expects the global supply growth of Atlantic salmon in 2025 to be low..
SalMar is committed to grow sustainably and create value for society and its shareholders. Where, how soon and how much depends on regulatory framework conditions.
SalMar has strong strategic and operational focus with dedicated employees and a corporate culture set for growth. The company has untapped potential for further sustainable growth within existing licenses in all regions. Not for growth's sake, but because salmon is a sustainable marine protein that Norway and the rest of the world needs.
Statement by the Board of Directors
We declare that, to the best of our knowledge, the half-year financial statements for the period 1 January to 30 June 2023 have been prepared in accordance with IAS 34 – Interim Reporting, and that the information contained therein provides a true and fair view of the Group's assets, liabilities, financial position and overall results.
We further declare that, to the best of our knowledge, the half-year report provides a true and fair view of important events that have taken place during the accounting period and their impact on the half-year financial statements, as well as the most important risks and uncertainties facing the business in the forthcoming accounting period.
The Board of Directors and CEO of SalMar ASA Frøya, 17 November 2024
Gustav Witzøe Chair
Arnhild Holstad Director
Margrethe Hauge Director
Morten Loktu Director
Leif Inge Nordhammer Director
Ingvild Kindlihagen Director (employee-elected)
Hans Stølan Director (employee-elected)
Frode Arntsen CEO
Financial Statement and Results Q3 2024
| 12 |
|---|
| 13 |
| 14 |
| 15 |
Notes to the Financial Statement
| Note 1 - Accounting principles and general information | 16 |
|---|---|
| Note 2 - Business segments | 18 |
| Note 3 - Revenue | 20 |
| Note 4 - Biological assets and fair value adjustments | 20 |
| Note 5 - Investments in associated companies and joint ventures | 21 |
| Note 6 - Interest-bearing liabilities | 22 |
| Note 7 - Interest and other financial items | 23 |
| Note 8 - Income tax, resource rent tax and production tax | 23 |
| Note 9 - Business combinations and changes in non-controlling interest | 23 |
| Note 10 - Discontinued operations | 24 |
| Note 11 - Share capital and shareholders | 25 |
| Note 12 - Alternative performance measures | 25 |
| Note 13 - Subsequent event | 27 |
Consolidated Statement of Profit or Loss
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Total operating revenues | 6,158 | 7,512 | 18,550 | 20,199 | 28,219 |
| Cost of goods sold | -3,040 | -3,451 | -8,635 | -9,019 | -12,880 |
| Salary and personnel expenses | -647 | -561 | -2,005 | -1,743 | -2,415 |
| Other operating expenses | -1,010 | -1,035 | -2,823 | -3,045 | -4,068 |
| Depreciation and amortization of tangible and intangible non current assets |
-421 | -352 | -1,238 | -1,038 | -1,419 |
| Write-downs of tangible and intangible non-current assets | -9 | 0 | -9 | 0 | -33 |
| Litigation and legal claims | -5 | -4 | -29 | -8 | -9 |
| Restructuring cost | -61 | 16 | -32 | -28 | -29 |
| Production tax | -60 | -73 | -159 | -130 | -208 |
| Onerous contracts | 16 | -98 | 337 | -11 | -237 |
| Fair value adjustment | 257 | 698 | 13 | 2,056 | 1,590 |
| Operating profit | 1,178 | 2,651 | 3,970 | 7,234 | 8,509 |
| Income from investments in associates and joint ventures | -20 | -18 | 84 | -62 | -27 |
| Net interest expenses | -311 | -338 | -789 | -887 | -1,172 |
| Other financial items | -8 | 9 | 25 | 20 | -30 |
| Profit before tax | 839 | 2,304 | 3,290 | 6,305 | 7,279 |
| Income tax expense | 579 | 1,623 | 1,235 | 4,819 | 4,534 |
| Profit for the period from continuing operations | 260 | 681 | 2,055 | 1,486 | 2,746 |
| Profit after tax for the period from discontinued operations | 0 | 385 | 0 | 655 | 657 |
| Profit for the period | 260 | 1,066 | 2,055 | 2,141 | 3,402 |
| Other comprehensive income: | |||||
| Items that may be reclassified to profit or loss in subsequent periods: |
|||||
| Translation differences in associates and joint ventures | 47 | -46 | 88 | 100 | 93 |
| Translation differences in group companies | 88 | -114 | 112 | 172 | 164 |
| Change in fair value of financial instruments, net after tax | -86 | 131 | -324 | 3 | 209 |
| Items that will not be reclassified to profit or loss in subsequent periods: |
|||||
| Remeasurement gain on defined benefit plans, net after tax | 0 | 0 | 0 | 0 | 1 |
| Total other comprehensive income | 49 | -29 | -124 | 275 | 467 |
| Total comprehensive income | 309 | 1,037 | 1,932 | 2,417 | 3,869 |
| Profit for the period attributable to: | |||||
| Non-controlling interests | -25 | 71 | 90 | 256 | 199 |
| Shareholders in SalMar ASA | 285 | 995 | 1,965 | 1,885 | 3,203 |
| Comprehensive income for the period attributable to: | |||||
| Non-controlling interests | 19 | 30 | 108 | 323 | 321 |
| Shareholders in SalMar ASA | 289 | 1,008 | 1,823 | 2,093 | 3,548 |
| Earnings per share | 2.2 | 7.6 | 14.9 | 14.3 | 24.4 |
| Earnings per share - diluted | 2.2 | 7.6 | 14.9 | 14.3 | 24.3 |
Consolidated Statement of Balance Sheet
| NOK million | 30.09.24 | 30.06.24 | 31.12.23 | 30.09.23 |
|---|---|---|---|---|
| ASSETS | ||||
| Non-current intangible assets | 19,494 | 18,805 | 18,685 | 18,409 |
| Non-current tangible assets | 12,763 | 12,689 | 12,371 | 12,078 |
| Right-of-use assets | 1,707 | 1,788 | 1,798 | 1,442 |
| Non-current financial assets | 2,825 | 2,940 | 2,679 | 2,784 |
| Total non-current assets | 36,789 | 36,222 | 35,533 | 34,714 |
| Inventory | 1,347 | 1,091 | 1,230 | 1,117 |
| Biological Assets | 14,383 | 13,111 | 13,265 | 14,384 |
| Trade receivables | 1,207 | 1,184 | 1,457 | 1,567 |
| Other current receivables | 745 | 631 | 1,061 | 723 |
| Cash and cash equivalents | 490 | 627 | 785 | 751 |
| Total current assets | 18,172 | 16,645 | 17,798 | 18,542 |
| Assets held for sale | 0 | 0 | 0 | 0 |
| TOTAL ASSETS | 54,961 | 52,867 | 53,331 | 53,256 |
| EQUITY AND LIABILITIES | ||||
| Paid-in equity | 9,803 | 10,090 | 10,050 | 12,596 |
| Retained earnings | 7,295 | 6,762 | 9,851 | 5,957 |
| Non-controlling interests | 2,378 | 3,233 | 3,178 | 2,922 |
| Total equity | 19,476 | 20,085 | 23,079 | 21,475 |
| Deferred tax liability | 7,239 | 6,448 | 6,725 | 7,369 |
| Non-current interest-bearing liabilities | 15,667 | 15,670 | 12,211 | 13,707 |
| Non-current lease liabilities | 1,357 | 1,442 | 1,502 | 1,207 |
| Other non-current liabilities | 104 | 36 | 21 | 10 |
| Total non-current liabilities | 24,368 | 23,596 | 20,459 | 22,293 |
| Current interest-bearing liabilities | 2,768 | 1,749 | 1,681 | 1,287 |
| Short-term lease liabilities | 418 | 413 | 344 | 272 |
| Trade creditors | 4,293 | 3,232 | 3,966 | 4,246 |
| Other current liabilities | 3,639 | 3,793 | 3,803 | 3,682 |
| Total current liabilities | 11,117 | 9,187 | 9,793 | 9,488 |
| Liabilities directly associated with the assets held for sale | 0 | 0 | 0 | 0 |
| TOTAL EQUITY AND LIABILITIES | 54,961 | 52,867 | 53,331 | 53,256 |
| Net interest-bearing debt (NIBD) | 17,945 | 16,791 | 13,107 | 14,243 |
| NIBD incl. lease liabilities | 19,720 | 18,646 | 14,952 | 15,722 |
| Equity share | 35.4 % | 38.0 % | 43.3 % | 40.3 % |
Consolidated Statement of Changes in Equity
| 2024 | Attributable to shareholders of SalMar ASA | Non | ||||||
|---|---|---|---|---|---|---|---|---|
| NOK million | Share capital |
Treasury shares |
Share premium |
Other paid in equity |
Other equity* |
Total | controlling interests |
Total equity |
| As of 1 January 2024 | 33 | 0 | 10,017 | 0 | 9,851 19,901 | 3,178 | 23,079 | |
| Comprehensive Income: | ||||||||
| Profit for the year | 0 | 0 | 0 | 0 | 1,965 | 1,965 | 90 | 2,055 |
| Other comprehensive income | 0 | 0 | 0 | 0 | -142 | -142 | 18 | -124 |
| Transactions with shareholders: | ||||||||
| Share-based payment | 0 | 0 | 0 | 60 | 0 | 60 | 0 | 60 |
| Dividend | 0 | 0 | 0 | 0 | -4,612 | -4,612 | -71 | -4,683 |
| Reclassifications and other changes | 0 | 0 | -306 | 0 | 294 | -12 | 0 | -12 |
| At 30 September 2024 | 33 | 0 | 9,710 | 60 | 7,295 17,098 | 2,378 | 19,476 |
| 2023 | Attributable to shareholders of SalMar ASA | Non | ||||||
|---|---|---|---|---|---|---|---|---|
| NOK million | Share capital |
Treasury shares |
Share premium |
Other paid in equity |
Other equity* |
Total | controlling interests |
Total equity |
| As of 1 January 2023 | 36 | -3 | 12,182 | 344 | 6,797 19,356 | 4,799 | 24,155 | |
| Comprehensive Income: | ||||||||
| Profit for the year | 0 | 0 | -2,163 | -392 | 5,758 | 3,203 | 199 | 3,402 |
| Other comprehensive income | 0 | 0 | 0 | 0 | 345 | 345 | 122 | 467 |
| Transactions with shareholders: | ||||||||
| Share-based payment | 0 | 0 | 0 | 44 | 6 | 50 | 1 | 51 |
| Dividend | 0 | 0 | 0 | 0 | -2,629 | -2,629 | -137 | -2,766 |
| Change in non-controlling interests | 0 | 0 | 0 | 0 | -239 | -239 | -516 | -755 |
| Divestment of non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 | -1,737 | -1,737 |
| Acquisition of interests with settlement in treasury shares |
0 | 0 | 0 | 4 | 113 | 117 | 130 | 247 |
| Treasury shares in subsidiaries | 0 | 0 | 0 | 0 | -319 | -319 | 319 | 0 |
| Share capital reduction | -3 | 3 | 0 | 0 | 0 | 0 | 0 | 0 |
| Reclassifications and other changes | 0 | 0 | -2 | 0 | 19 | 17 | -2 | 15 |
| At 31 December 2023 | 33 | 0 | 10,017 | 0 | 9,851 19,901 | 3,178 | 23,079 |
*) Other equity includes Other equity, Foreign currency translation differences, Cash flow hedges, Hedge of net investments and Cost of hedging reserve
Consolidated Statement of Cash Flows
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Profit before tax | 839 | 2,304 | 3,290 | 6,305 | 7,279 |
| Profit before taxes from discontinuing operations | 0 | 387 | 0 | 683 | 685 |
| Profit before taxes | 839 | 2,691 | 3,290 | 6,988 | 7,964 |
| Tax paid in the period | -12 | -95 | -96 | -213 | -608 |
| Depreciation, amortisation and write-downs | 430 | 353 | 1,247 | 1,039 | 1,452 |
| Income from associated companies and joint ventures | 20 | 18 | -84 | 62 | 27 |
| Onerous contracts | -16 | 98 | -337 | 11 | 237 |
| Fair value adjustments | -257 | -522 | 77 | -1,445 | -867 |
| Change in working capital | -247 | 358 | -1,160 | -415 | -170 |
| Other changes | 329 | 329 | 856 | 873 | 1,150 |
| Gain on disposal discontinuing operations | 0 | -363 | 0 | -363 | -365 |
| Cash-flow from operating activities related to discontinuing | 0 | 110 | 0 | 155 | 155 |
| operations | |||||
| Net cash flow from operating activities | 1,086 | 2,977 | 3,793 | 6,691 | 8,975 |
| Cash-flow from purchase and sale of PPE, licenses and other intangible assets |
-1,018 | -420 | -2,028 | -1,711 | -2,348 |
| Proceeds from disposal of group companies, net of cash | 0 | 4,454 | 0 | 4,454 | 4,454 |
| Proceeds from disposal of other financial investments | 0 | 0 | 0 | 45 | 45 |
| Cash-flow form other investing activities | 133 | -9 | 90 | 26 | 37 |
| Cash-flow from investing activates related to discontinuing operations |
0 | -108 | 0 | -412 | -412 |
| Net cash flow from investing activities | -885 | 3,916 | -1,938 | 2,402 | 1,775 |
| Change in interest-bearing liabilities | 994 | -6,725 | 4,494 | -6,836 | -7,947 |
| Payment of instalments on lease liabilities | -104 | -76 | -302 | -237 | -321 |
| Payment of interest on lease liabilities | -29 | -23 | -90 | -70 | -102 |
| Net interest paid financing activities | -273 | -417 | -663 | -876 | -1,145 |
| Dividend | -37 | -14 | -4,683 | -2,708 | -2,748 |
| Change in non-controlling interests | -900 | 0 | -900 | -671 | -755 |
| Other changes | 0 | 0 | -11 | 0 | 0 |
| Cash-flow from financing activities related to discontinuing operations |
0 | -42 | 0 | 29 | 29 |
| Net cash flow from financing activities | -350 | -7,297 | -2,154 | -11,369 | -12,989 |
| Net change in cash and cash equivalents | -149 | -404 | -299 | -2,276 | -2,239 |
| Currency translation of cash and cash equivalents | 13 | -9 | 4 | -5 | -7 |
| Cash and cash equivalents as at the start of the period | 627 | 784 | 785 | 2,713 | 2,713 |
| Cash and cash equivalents discontinuing operations at start | 0 | 379 | 0 | 319 | 319 |
| of the period Cash and cash equivalents as at period end |
490 | 751 | 490 | 751 | 785 |
| Of which cash and cash equivalents in discontinuing | 0 | 0 | 0 | 0 | 0 |
| operations at period end | |||||
| Cash and cash equivalents excluding discontinuing operations at period end |
490 | 751 | 490 | 751 | 785 |
Notes to the Financial Statements
Note 1 - Accounting principles and general information
This report has been prepared in accordance with International Financial Reporting Standards (IFRS), including the standard for interim reporting (IAS 34). The report does not include all information required in a complete annual report and should therefore be read in conjunction with the Group's recent annual report. Please refer to the Group's latest IFRS year-end financial statements, which are published on the Group's website, www.salmar.no, for a complete description of the accounting principles and other general information.
In the financial report of the third quarter of 2024, the presentation of the Consolidated Statement of Profit or Loss has been changed compared to the presentation included in the annual report of 2023 by excluding the subtotal of operational EBIT. The subtotal has been excluded to provide better information in terms of performance and comparability between peers. Three new financial statement lines in the Consolidated Statement of Profit or Loss has been added; write-downs of tangible and intangible non-current assets, litigation and legal claims and restructuring cost. The new line items do not affect reported operating profit but represent a reclassification of expenses included in the operating profit. Comparative figures have been adjusted accordingly. The Group management evaluates the segments performance on the basis of operational EBIT. In the operational EBIT the new financial statement lines are excluded. For a reconciliation between operating profit in the Consolidated Statement of Profit or Loss and operational EBIT in the segment reporting, see note 12 Alternative performance measures.
This interim report has not been subject to external audit.
Note 2 - Business segments
The Group's business areas comprise of Fish Farming, Sales & Industry and the Group's operations in Iceland which are reported as a separate unit and are defined as a separate segment. In addition, SalMar Aker Ocean, the Group's offshore farming is defined as a separate segment.
Fish farming in Norway is divided into two regions, Fish Farming Central Norway and Fish Farming Northern Norway, which are defined as separate segments, and are reported and administered as such internally. The Group's hatchery operations are also included in these segments.
The operating unit Icelandic Salmon, located in Iceland, is a fully integrated aquaculture company, with its own hatchery, sea farms, harvesting plant and sales force. This segment's combined results are reported through the business segment Icelandic Salmon.
SalMar Aker Ocean is a partnership between SalMar and Aker that specialise in offshore farming. The company has two semi-offshore units in operation, Ocean Farm 1 in Central Norway and Arctic Offshore Farming in Northern Norway.
Group management evaluates the segments' performance on the basis of Operational EBIT.
The column Other/Eliminations includes costs relating to share-based employee cost, R&D costs relating to jointly operated licences and overheads not allocated to segments.
Sales between segments are carried out in accordance with the arm's length principle. When revenues from external parties are reported to group management, they are measured at the same amount recognised in profit and loss. Assets and liabilities are not reported to group management at segment level.
| NOK million | Farming Central Norway |
Farming Northern Norway |
Sales and Industry |
Icelandic Salmon |
SalMar Aker Ocean |
Other/ Eliminations |
Group |
|---|---|---|---|---|---|---|---|
| Q3 2024 | |||||||
| Operating revenues | 2,732 | 1,246 | 6,150 | 169 | 146 | -4,285 | 6,158 |
| Operational EBIT | 483 | 190 | 464 | -35 | -7 | -55 | 1,041 |
| Harvested volume (1,000 tgw) | 38.2 | 18.3 | 1.8 | 2.1 | 60.3 | ||
| EBIT/ kg gw (NOK) | 12.7 | 10.4 | -20.0 | 17.3 | |||
| Operational EBIT % | 18 % | 15 % | 8 % | -21 % | -5 % | 17 % | |
| Q3 2023 | |||||||
| Operating revenues | 3,817 | 2,033 | 7,236 | 476 | 0 | -6,050 | 7,512 |
| Operational EBIT | 1,202 | 868 | 236 | 35 | -8 | -44 | 2,289 |
| Harvested volume (1,000 tgw) | 48.4 | 25.7 | 4.0 | 0.0 | 78.1 | ||
| EBIT/ kg gw (NOK) | 24.9 | 33.8 | 8.7 | 29.3 | |||
| Operational EBIT % | 31 % | 43 % | 3 % | 7 % | -5466 % | 30 % | |
| YTD 2024 | |||||||
| Operating revenues | 8,174 | 4,148 | 18,459 | 596 | 574 | -13,400 | 18,550 |
| Operational EBIT | 2,780 | 1,174 | 337 | -84 | -65 | -201 | 3,940 |
| Harvested volume (1,000 tgw) | 93.1 | 52.8 | 5.2 | 6.9 | 158.0 | ||
| EBIT/ kg gw (NOK) | 29.9 | 22.2 | -16.2 | -9.5 | 24.9 | ||
| Operational EBIT % | 34 % | 28 % | 2 % | -14 % | -11 % | 21 % | |
| YTD 2023 | |||||||
| Operating revenues | 8,996 | 5,458 | 19,477 | 1,267 | 0 | -14,998 | 20,199 |
| Operational EBIT | 3,419 | 2,562 | 88 | 204 | -63 | -244 | 5,966 |
| Harvested volume (1,000 tgw) | 98.9 | 61.4 | 10.7 | 0.0 | 171.0 | ||
| EBIT/ kg gw (NOK) | 34.6 | 41.7 | 19.1 | 34.9 | |||
| Operational EBIT % | 38 % | 47 % | — % | 16 % | 405670 % | 30 % | |
| FY 2023 | |||||||
| Operating revenues | 12,419 | 7,894 | 27,094 | 1,871 | 173 | -21,233 | 28,219 |
| Operational EBIT | 4,597 | 3,402 | 254 | 230 | -53 | -272 | 8,159 |
| Harvested volume (1,000 tgw) | 141.1 | 92.8 | 17.9 | 2.3 | 254.1 | ||
| EBIT/ kg gw (NOK) | 32.6 | 36.7 | 12.8 | -22.9 | 32.1 | ||
| Operational EBIT % | 37 % | 43 % | 1 % | 12 % | -30 % | 29 % |
Note 3 - Revenue
Specification of the Group's revenues by geographic market:
| Q3 2024 | % | Q3 2023 | % | YTD 2024 | % | YTD 2023 | % | FY 2023 | % | |
|---|---|---|---|---|---|---|---|---|---|---|
| Asia | 1,278 | 20.9 % | 1,615 | 21.6 % | 4,117 | 22.3 % | 4,848 | 24.2 % | 6,434 | 22.9 % |
| USA/Canada | 1,219 | 19.9 % | 1,394 | 18.7 % | 3,615 | 19.6 % | 3,980 | 19.8 % | 5,175 | 18.4 % |
| Europe, ex. Norway | 2,054 | 33.6 % | 2,609 | 34.9 % | 6,089 | 33.0 % | 6,625 | 33.0 % | 9,716 | 34.6 % |
| Norway | 1,526 | 24.9 % | 1,769 | 23.7 % | 4,463 | 24.2 % | 4,375 | 21.8 % | 6,444 | 22.9 % |
| Other | 45 | 0.7 % | 84 | 1.1 % | 171 | 0.9 % | 240 | 1.2 % | 330 | 1.2 % |
| Total revenues from contracts with customers |
6,122 100.0 % | 7,471 100.0 % | 18,455 100.0 % | 20,068 100.0 % | 28,099 | 100.0 % | ||||
| Other operating income | 35 | 41 | 96 | 131 | 119 | |||||
| Total revenue and other income | 6,158 | 7,512 | 18,550 | 20,199 | 28,219 |
Note 4 - Biological assets and fair value adjustments
| Carrying amount of biological assets | 30.09.24 | 30.06.24 | 31.12.23 | 30.09.23 |
|---|---|---|---|---|
| Biological assets held at sea farms at cost | 9,053 | 7,858 | 7,888 | 8,454 |
| Fair value adjustment of biological assets | 4,720 | 4,464 | 4,761 | 5,354 |
| Total carrying amount of biological assets held at sea farms | 13,773 | 12,322 | 12,648 | 13,808 |
| Roe, fry, smolt and cleaner fish at cost | 609 | 789 | 616 | 576 |
| Total carrying amount of biological assets | 14,383 | 13,111 | 13,265 | 14,384 |
Stocks of biological assets relate to SalMars fish farming operations on land and at sea, and comprise roe, fry, smolt, cleaner fish and fish at sea farms.
| Change in the carrying amount of the biological assets: | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Biological assets - opening balance | 13,111 | 13,294 | 13,265 | 11,755 | 11,755 |
| Increase due to production | 4,756 | 4,660 | 10,669 | 10,181 | 13,863 |
| Decrease due to sale/ harvesting | -3,750 | -4,009 | -9,374 | -8,945 | -13,007 |
| Decrease due to incident-based mortality | -16 | -8 | -171 | -77 | -251 |
| Decrease due to sale of group companies | 0 | -9 | 0 | -9 | -9 |
| Fair value adjustment on opening balance (reversed) | -4,464 | -4,840 | -4,761 | -3,908 | -3,908 |
| Fair value adjustment from business combination due to fish not sold on opening balance |
0 | 378 | 90 | 813 | 813 |
| Fair value adjustment from business combination due to fish not sold on closing balance |
0 | -202 | 0 | -202 | -90 |
| Fair value adjustment from business combination included in cost of goods sold in the period |
0 | -176 | -90 | -612 | -723 |
| Fair value adjustment on closing balance (new) | 4,720 | 5,354 | 4,720 | 5,354 | 4,761 |
| Currency translation differences | 26 | -58 | 34 | 33 | 60 |
| Biological assets - closing balance | 14,383 | 14,384 | 14,383 | 14,384 | 13,265 |
The accounting for live fish is regulated by IAS 41 Agriculture and biological assets are recognised at fair value in accordance with IFRS 13.
The company's stocks of live fish held at sea farms are, in accordance with IAS 41, recognised at fair value. Present value is calculated on the basis of estimated revenues less production costs remaining until the fish is harvestable at the individual site. A fish is harvestable when it has reached the estimated weight required for harvesting specified in the company's budgets and plans. The estimated value is discounted to present value on the reporting date.
Estimated future revenues are calculated on the basis of Fish Pool forward prices on the balance sheet date. A quarterly price average is calculated, since the fish are harvested over several periods. Forward prices are adjusted for export supplements, shipping, sales and harvesting costs. An adjustment is also made for expected variations in fish quality. In the absence of price quotations on Fish Pool, forward prices have been calculated on the basis of price expectations obtained from industry analysts.
The monthly discount factor reflects the time value of money, the risk in biological production and a hypothetical licence fees and site rental cost. The discount factor is based on expectations on profitability in the industry which impact the hypothetical license fee and can vary in different areas.
Roe, fry, smolt and cleaner fish are recognised at historic cost. Historic cost is deemed to be the best estimate of fair value for these assets, due to little biological conversion.
| Discount factor per region | 30.09.24 | 30.06.24 | 31.12.23 | 30.09.23 |
|---|---|---|---|---|
| Norway | 6.0 % | 6.0 % | 6.5 % | 7.0 % |
| Iceland | 4.5 % | 4.5 % | 5.0 % | 5.0 % |
Fair value adjustments are part of the Group's operating profit. The line fair value adjustments comprises:
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Change in the fair value of the biological assets | 255 | 692 | 49 | 2,052 | 1,571 |
| Change in unrealised value of Fish Pool contracts | 2 | 6 | -35 | 4 | 19 |
| Total fair value adjustments | 257 | 698 | 13 | 2,056 | 1,590 |
Note 5 - Investments in associated companies and joint ventures
Joint ventures are entities where the group has joint control and the parties in the joint arrangement have right to the net assets of the arrangement. Associates are all entities, except joint ventures, over which the group has significant influence but not control.
All associates and joint ventures are accounted for using the equity method. Since none of the Group's associates or joint ventures are listed on a stock exchange, no observable market values are available.
Based on an overall assessment, in which size and complexity have been taken into account, Norskott Havbruk AS, Wilsgård Fiskeoppdrett AS and Hellesund Fiskeoppdrett AS are considered to be material associates and joint ventures. Further details relating to these material assets are presented below.
Please see the latest annual report for further information.
| NOK million | Norskott Havbruk |
Hellesund Fiskeoppdrett |
Wilsgård Fiskeoppdrett |
Others | Total |
|---|---|---|---|---|---|
| Carrying amount at 30 June 2024 | 1,210 | 468 | 638 | 237 | 2,554 |
| Income from associates and joint ventures | -16 | -3 | -14 | 13 | -20 |
| Items recognised in other comprehensive income | 45 | 0 | 0 | 2 | 47 |
| Dividend | 0 | -5 | 0 | -8 | -13 |
| Other changes in associates | 0 | 0 | -1 | 0 | -1 |
| Carrying amount at 30 September 2024 | 1,239 | 460 | 623 | 245 | 2,567 |
| NOK million | Norskott Havbruk |
Hellesund Fiskeoppdrett |
Wilsgård Fiskeoppdrett |
Others | Total |
|---|---|---|---|---|---|
| Carrying amount at 1 January 2024 | 1,076 | 464 | 651 | 226 | 2,417 |
| Income from associates and joint ventures | 78 | 2 | -27 | 31 | 84 |
| Items recognised in other comprehensive income | 85 | 0 | 0 | 3 | 88 |
| Dividend | 0 | -5 | 0 | -16 | -21 |
| Other changes in associates | 0 | 0 | -1 | 0 | -1 |
| Carrying amount at 30 September 2024 | 1,239 | 460 | 623 | 245 | 2,567 |
Note 6 - Interest-bearing liabilities
| Non-current interest bearing liabilities | 30.09.24 | 30.06.24 | 31.12.23 | 30.09.23 |
|---|---|---|---|---|
| Non-current interest bearing liabilities | 12,729 | 12,704 | 9,259 | 11,243 |
| Green bond | 3,500 | 3,500 | 3,500 | 3,500 |
| Amortised cost | -66 | -74 | -90 | -50 |
| Total | 16,163 | 16,129 | 12,669 | 14,693 |
| Next year's instalment on non-current interest bearing liabilities | -496 | -460 | -458 | -985 |
| Total | 15,667 | 15,670 | 12,211 | 13,707 |
| Lease liabilities | 1,774 | 1,855 | 1,845 | 1,479 |
| Next year's instalment on lease liabilities | -418 | -413 | -344 | -272 |
| Total | 1,357 | 1,442 | 1,502 | 1,207 |
| Total Non-current interest bearing liabilities | 17,024 | 17,112 | 13,713 | 14,914 |
| Current interest bearing liabilities | 30.09.24 | 30.06.24 | 31.12.23 | 30.09.23 |
|---|---|---|---|---|
| Bank overdraft | 1,273 | 409 | 1,223 | 302 |
| Commercial Paper | 1,000 | 880 | 0 | 0 |
| Next year's instalment on non-current interest bearing liabilities | 496 | 460 | 458 | 985 |
| Current interest bearing liabilities ex. lease liabilities | 2,768 | 1,749 | 1,681 | 1,287 |
| Next year's instalment on lease liabilities | 418 | 413 | 344 | 272 |
| Total Current interest bearing liabilities | 3,186 | 2,162 | 2,024 | 1,559 |
| Net-interesting bearing debt | 30.09.24 | 30.06.24 | 31.12.23 | 30.09.23 |
|---|---|---|---|---|
| Total non-current and current interest-bearing liabilities | 20,210 | 19,274 | 15,737 | 16,473 |
| Cash and cash equivalents | -490 | -627 | -785 | -751 |
| Lease liabilities | -1,774 | -1,855 | -1,845 | -1,479 |
| Net interest-bearing debt | 17,945 | 16,791 | 13,107 | 14,243 |
| Unused drawing rights | 30.09.24 | 30.06.24 | 31.12.23 | 30.09.23 |
|---|---|---|---|---|
| Unused credit facilities | 5,422 | 5,592 | 8,740 | 6,500 |
| Unused bank overdraft | 820 | 1,842 | 1,014 | 1,416 |
| Total unused drawing rights | 6,242 | 7,434 | 9,754 | 7,916 |
The most important financial covenants for the long-term financing of SalMar ASA are, respectively, a solvency requirement, which stipulates that the Group's recognised equity ratio shall exceed 30 %, and a profitability requirement, which stipulates that the Group's interest coverage rate (EBITDA/net financial expenses) shall not fall below 3.0. The green bond has a financial covenant requiring an equity ratio of 30 % in the agreement period.
The financing schemes of Arnarlax Ehf and SalMar Aker Ocean are independent from SalMar ASA.
Both SalMar ASA, Arnarlax Ehf and SalMar Aker Ocean were in compliance with all the financial covenants as of 30 September 2024.
In addition to the existing bank facilities consisting of NOK 10,000 million as revolving credit facilities and NOK 6,000 million as a term loan, SalMar issued a commercial paper of NOK 1 000 million on 13 September 2024 with a maturity date of 13 March 2025 and a coupon of 5.13% p.a.
For further details related to interesting bearing debt please see latest annual report.
Note 7 - Interest and other financial items
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Interest | |||||
| Interest income | 11 | 10 | 27 | 35 | 51 |
| Interest expenses, ex. interest on lease liabilities | -292 | -325 | -726 | -852 | -1,121 |
| Interest expenses relating to lease liabilities | -29 | -23 | -90 | -70 | -102 |
| Net interest expenses | -311 | -338 | -789 | -887 | -1,172 |
| Other financial items | |||||
| Dividends and gain on investment in other companies | 0 | 0 | 8 | 7 | 27 |
| Other financial income | -1 | 47 | 19 | 46 | 3 |
| Other exchange differences | -6 | -2 | 3 | 13 | -10 |
| Change in fair value of derivatives | 1 | 0 | 1 | -7 | -7 |
| Other financial expenses | -2 | -35 | -6 | -38 | -43 |
| Net other financial items | -8 | 9 | 25 | 20 | -30 |
| Net financial items | -319 | -329 | -764 | -867 | -1,203 |
Note 8 - Income tax, resource rent tax and production tax
On 31 May 2023, the Norwegian Parliament approved an additional resource rent tax on aquaculture in Norway with a tax rate of 25%. The resource rent tax is in addition to the regular corporate tax on 22%, gives a total tax rate on aquaculture of 47%. The new tax applied retroactively from 1 January 2023.
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Regular corporate tax expense - calculated with nominal tax rate |
232 | 503 | 693 | 1,396 | 1,618 |
| Resource rent tax (payable and deferred tax) | 347 | 1,120 | 541 | 1,120 | 836 |
| Resource rent tax - implementation effect (deferred tax) | 0 | 0 | 0 | 2,303 | 2,080 |
| Income tax expense | 579 | 1,623 | 1,235 | 4,819 | 4,534 |
The production tax implemented on the Norwegian aquaculture activity with effect from 01 January 2021 is directly deductible in the payable resource rent tax with effect from 1 January 2023.
The total resource rent tax related to the profit in the period is therefore the total of production tax related to the Norwegian aquaculture activity and resource rent tax calculated in the period. The production tax on the Norwegian activity increased from NOK 0,56 per kg to NOK 0,90 per kg with effect form 1 July 2023. For 2024 the production tax has been on NOK 0.935 per kg.
The total effect of the resource rent tax including production tax is shown below:
| NOK million | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Production tax recognised in the period | 60 | 73 | 159 | 130 | 208 |
| Resource tax related to activity on Iceland | 6 | 6 | 16 | 15 | 25 |
| Production tax related to activity in Norway | 55 | 67 | 143 | 115 | 183 |
| Resource rent tax (payable and deferred tax) | 347 | 1,120 | 541 | 1,120 | 837 |
| Total resource rent tax in comprehensive income | 402 | 1,187 | 684 | 1,235 | 1,020 |
| Resource rent tax - implementation effect (deferred tax) | 0 | 0 | 0 | 2,303 | 2,080 |
| Total resource rent tax including production tax | 402 | 1,187 | 684 | 3,538 | 3,100 |
Note 9 - Business combinations and changes in non-controlling interest
Business combinations in 2024
No business combinations have been completed in 2024.
Acquisition of non-controlling interests in 2024
Refsnes Laks AS
With effect from July 2024 SalMar has acquired a total 1,590 shares in Refsnes Laks AS, representing 55 per cent of the shares in the company. The total consideration for the shares was NOK 890 million. Through the transaction SalMar increased its shareholding in the company from 45 per cent to 100 per cent. Through shareholders agreement, SalMar had established control over the investment before the transaction. For accounting purposes, the transaction has been recognised as a change in non-controlling interests, with effect recognised directly to equity. Of the total amount of NOK 890 million, NOK 831 million have an effect on non-controlling interest.
Øylaks MTB AS
With effect from August 2024 SalMar has acquired 2 per cent of the shares in Øylaks MTB AS. Through the transaction SalMar increased its shareholding in the company from 49 per cent to 51 per cent. Through shareholders agreement, SalMar had established control over the investment before the transaction. For accounting purposes, the transaction has been recognised as a change in noncontrolling interests, with effect recognised directly to equity. The consideration was amounted to NOK 5 million, consisting of 8, 458 consideration shares.
Note 10 - Discontinued operations
Through the acquisition of NTS in 2022, Frøy AS became a subsidiary of the SalMar group. SalMar owned 100 per cent of the shares in NTS, which owned 72,11 per cent of the shares in Frøy AS.
On 14 August 2023, it was announced that a transaction between NTS AS, Falcon Bidco AS, a company indirectly wholly owned by infrastructure funds managed by Goldman Sachs Asset Management, and Frøy AS was completed. Falcon Bidco AS acquired NTS' entire ownership stake in Frøy, and a cash consideration of NOK 76,50 per share was paid in the transaction, with proceeds from the sale amounting to NOK 4,764 million.
Following the decision made by the SalMar board in December 2022 to explore the strategic alternatives, Frøy AS was classified as a disposal group held for sale and as a discontinued operation from the completion of the voluntary offer of all outstanding shares in NTS AS with effect from 1 November 2022, until the completion of the transaction 14 August 2023.
The cash consideration from the sale of Frøy AS amounted to NOK 4,764 million. Cash in Frøy at the time of the transaction amounted to NOK 365 million. Total proceeds from the sale of Frøy AS net of cash amounted to NOK 4,400 million.
Closing of the transaction where Frøy AS acquired 100% of the shares of Marinus Aquaservice AS took place beginning of April and Marinus is included in Frøy AS's consolidated accounts from 01.04.2023.
| 01.07.2023- 14.08.2023 |
01.01.2023- 14.08.2023 |
|
|---|---|---|
| Profit for the period from discontinued operations | 22 | 291 |
| Profit for the period from discontinued operations, gain from sale | 363 | 365 |
| Total profit from discontinued operations | 385 | 657 |
| Other comprehensive income: |
Items that may be reclassified to profit or loss in subsequent periods:
Change in fair value of financial instruments, net after tax -7 0
| Total comprehensive income from discontinued operations | 276 | 657 |
|---|---|---|
Note 11 - Share capital and shareholders
At 30 September 2024, the parent company's share capital comprised:
| Number | Face value | Book value | |
|---|---|---|---|
| of shares | NOK per share | NOK | |
| Ordinary shares | 132,038,920 | 0.25 | 33,009,730 |
There are no current limitations on voting rights or trade limitations related to the SalMar share.
The company's 20 largest shareholders as at 30 September 2024, were:
| Shareholder | Number of shares |
Shareholding | Voting Share |
|---|---|---|---|
| KVERVA INDUSTRIER AS | 59,934,476 | 45.39 % | 45.48 % |
| FOLKETRYGDFONDET | 8,372,758 | 6.34 % | 6.35 % |
| State Street Bank and Trust Comp | 2,289,991 | 1.73 % | 1.74 % |
| TERBOLI INVEST AS | 1,425,394 | 1.08 % | 1.08 % |
| JPMorgan Chase Bank, N.A., London | 1,394,041 | 1.06 % | 1.06 % |
| LIN AS | 1,337,685 | 1.01 % | 1.02 % |
| HASPRO AS | 1,171,542 | 0.89 % | 0.89 % |
| PARETO AKSJE NORGE VERDIPAPIRFOND | 1,162,107 | 0.88 % | 0.88 % |
| VERDIPAPIRFONDET ALFRED BERG GAMBA | 1,155,226 | 0.87 % | 0.88 % |
| State Street Bank and Trust Comp | 1,081,585 | 0.82 % | 0.82 % |
| CACEIS Bank | 1,005,648 | 0.76 % | 0.76 % |
| VERDIPAPIRFOND ODIN NORDEN | 991,035 | 0.75 % | 0.75 % |
| WILLIKSEN FORVALTNING AS | 915,144 | 0.69 % | 0.69 % |
| VERDIPAPIRFONDET KLP AKSJENORGE IN | 840,721 | 0.64 % | 0.64 % |
| CLEARSTREAM BANKING S.A. | 824,413 | 0.62 % | 0.63 % |
| JPMorgan Chase Bank, N.A., London | 812,292 | 0.62 % | 0.62 % |
| ANDVARI AS | 810,468 | 0.61 % | 0.62 % |
| JPMorgan Chase Bank, N.A., London | 810,415 | 0.61 % | 0.62 % |
| State Street Bank and Trust Comp | 756,990 | 0.57 % | 0.57 % |
| BONDØ INVEST AS | 738,392 | 0.56 % | 0.56 % |
| Top 20 | 87,830,323 | 66.52 % | 66.65 % |
| Others | 43,938,291 | 33.28 % | 33.35 % |
| SalMar ASA | 270,306 | 0.20 % | |
| Total | 132,038,920 | 100.00 % | 100.00 % |
Note 12 - Alternative performance measures
The SalMar Group prepares its financial statements in accordance with international accounting standards (IFRS). In addition, management has established alternative performance parameters to provide useful and relevant information to users of its financial statements. Alternative performance parameters have been established to provide greater understanding of the company's underlying performance, and do not replace the consolidated financial statements prepared in accordance with international accounting standards (IFRS): The performance parameters have been reviewed and approved by the Group's management and Board of Directors. Alternative performance parameters may be defined and used in other ways by other companies.
The APMs are deduced from the performance measures defined in IFRS. The figures are defined below and calculated in a consistent manner. They are presented in addition to other performance measures, in keeping with the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA).
Operational EBIT
Operational EBIT is an APM used by the Group. The relationship between operational EBIT and operating profit in the Consolidated Statement of Profit or Loss is presented in the table below. The difference between operational EBIT and operating profit relates to provisions for production tax and onerous contracts, and items which are classified in the financial statements on the line for fair value adjustments. These items are market value and fair value assessments linked to assumptions about the future. In addition non recurring cost defined as write-downs of non-current assets, litigation and legal claims and restructuring cost are not included in the operational EBIT. Operational EBIT shows the underlying operation and the results of transactions undertaken in the period.
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Operating profit | 1,178 | 2,651 | 3,970 | 7,234 | 8,509 |
| Write-downs of tangible and intangible non-current assets | 9 | 0 | 9 | 0 | 33 |
| Litigation and legal claims | 5 | 4 | 29 | 8 | 9 |
| Restructuring cost | 61 | -16 | 32 | 28 | 29 |
| Production tax | 60 | 73 | 159 | 130 | 208 |
| Onerous contracts | -16 | 98 | -337 | 11 | 237 |
| Change in the fair value adjustment included in cost of goods sold due to business combination |
0 | 176 | 90 | 612 | 723 |
| Fair value adjustment: | |||||
| Change in the fair value of the biological assets | -255 | -692 | -49 | -2,052 | -1,571 |
| Change in unrealised value of Fish Pool contracts | -2 | -6 | 35 | -4 | -19 |
| Operational EBIT | 1,041 | 2,289 | 3,940 | 5,966 | 8,159 |
EBITDA
EBITDA is another alternative performance measure used by the Group. EBITDA is Operational EBIT plus depreciation and
| amortization of non-current assets. | |||||
|---|---|---|---|---|---|
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
| Operational EBIT | 1,041 | 2,289 | 3,940 | 5,966 | 8,159 |
| Depreciation and amortization of tangible and intangible non current assets |
421 | 352 | 1,238 | 1,038 | 1,419 |
| EBITDA | 1,462 | 2,641 | 5,178 | 7,004 | 9,578 |
EBIT/kg gw
EBIT per kg gutted weight is defined as a key performance parameter for SalMar. The performance parameter is used to assess the profitability of the goods sold and the Group's operations. The performance parameter is expressed per kg of harvested volume.
Net interest-bearing debt
Net interest-bearing debt is an alternative performance measure used by the Group. The performance measure is used to express the Group's working capital, and is an important performance measure for investors and other users, because it the shows net borrowed capital used to finance the Group. Net interest-bearing debt is defined as long-term and short-term debt to credit institutions, less cash & cash equivalents. Leasing liabilities under IFRS 16 are not included in the calculation of net interest-bearing debt. To highlight total interest bearing debt including leasing liabilities, this is presented as a separate measure.
| 30.09.24 | 30.06.24 | 31.12.23 | 30.09.23 | |
|---|---|---|---|---|
| Non-current interest-bearing debts | 15,667 | 15,670 | 12,211 | 13,707 |
| Current interest-bearing liabilities | 2,768 | 1,749 | 1,681 | 1,287 |
| Cash and cash equivalents | -490 | -627 | -785 | -751 |
| Net interest-bearing debt (NIBD) | 17,945 | 16,791 | 13,107 | 14,243 |
| Lease liabilities | 1,774 | 1,855 | 1,845 | 1,479 |
| NIBD incl. lease liabilities | 19,720 | 18,646 | 14,952 | 15,722 |
NIBD incl. lease liabilities / EBITDA
NIBD incl. lease liabilities / EBITDA is an APM used by the Group to measure leverage. The figure is arrived at by dividing NIBD incl. lease liabilities at the end of the period with EBITDA for the last 12 months.
Adjusted earnings per share
The Group uses adjusted earnings per share to reflect earnings excluding implementation effect resource rent tax and net fair value adjustments. The key figure is arrived at by dividing the profit for the period adjusted for onerous contracts, fair value adjustements and changes in deferred taxes by the average number of shares outstanding (diluted) in the period.
| NOK million | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Profit for the period attributable to shareholders in SalMar ASA | 285 | 995 | 1,965 | 1,885 | 3,203 |
| Onerous contracts *) | -16 | 98 | -337 | 11 | 237 |
| Fair value adjustment *) | -257 | -698 | -13 | -2,056 | -1,590 |
| Fair value adjustment included in cost of goods sold due to business combination *) |
0 | 176 | 90 | 612 | 723 |
| Calculated tax effect of adjustments **) | 332 | 563 | 251 | 791 | 520 |
| Resource rent tax - implementation effect (deferred tax) *) | 0 | 0 | 0 | 2,303 | 2,080 |
| Fair value adjustment related to biological assets in associates and joint ventures, net of tax |
23 | -10 | 49 | -8 | -23 |
| Adjusted profit for the period attributable to shareholders in SalMar ASA |
368 | 1,123 | 2,005 | 3,536 | 5,150 |
| Average no. of shares outstanding (diluted) in the period (1,000 shares) |
132.0 | 131.6 | 132.0 | 131.6 | 131.6 |
| Adjusted earnings per share | 2.79 | 8.53 | 15.19 | 26.87 | 39.13 |
*) The adjustments made to the profit for the period attributable to shareholders in SalMar ASA in the table above, are inclusive of non-controlling interest.
**) Calculated tax rate 22% for Onerous contracts, Fair value adjustment and Fair value adjustment included in cost of gooods sold due to business combination, and the calculated change in deferred resource rent tax on the biomass has been added.
Note 13 - Subsequent event
Acquisition of non-controlling interests
With effect from October 2024, SalMar acquired the remaining 49 per cent of the shares in Hitramat Farming AS. SalMar owns 100 per cent of the shares in the company after the transaction. For accounting purposes, the transaction will bee recognised as a change in non-controlling interests, with effect recognised directly to equity in Q4 2024.
Sale of Osan Settefisk AS
In November 2024 SalMar entered into an agreement to sell its 66% stake in Osan Settefisk AS, where as part of the transaction the 41% ownership in Flatanger Settefisk AS will be transferred to SalMar. Sale is expected to be completed in the fourth quarter 2024 with a positive NIBD effect of sale of NOK 660 million.
Aquisition of controlling interest in AS Knutshaugfisk
In November 2024 entered into an agreement to purchase 45% ownership in AS Knutshaugfisk. Control is established through shareholder agreements and results and volumes are expected to be consolidated from 2025. The transaction date is expected to be 1st of January 2025, dependent on regulatory approval. Settlement is 80% SalMar shares and 20% cash.
AS Knushaugfisk is operating in production area 6 in Central Norway and holds 3,464 MAB tonnes in licenses and has 4 farming sites.