Earnings Release • Aug 24, 2023
Earnings Release
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SalMar - Delivering strong 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.
The complete report and presentation for the second quarter and first half of
2023 is attached.
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 (http://www.salmar.no).
Capital Markets Day 2023
SalMar will provide more insight into the group's strategic plans at the capital
market day 2023. The event takes place on 6-7 September in Tromsø and Senja.
Visit our website for more information: https://www.salmar.no/investor/capital-
markets-day/
For further information, please contact:
Frode Arntsen, CEO
Tel: +47 482 06 665
Email: [email protected]
Ulrik Steinvik, CFO
Tel: +47 900 84 538
Email: [email protected]
Håkon Husby, Head of Investor Relations
Tlf: +47 936 30 449
Email: [email protected]
About SalMar
SalMar is one of the world's largest and most efficient producers of salmon. The
Group has farming operations in Central Norway, Northern Norway and Iceland, as
well as substantial harvesting and secondary processing operations. In addition,
the company is operating within offshore aquaculture through the company SalMar
Aker Ocean and SalMar owns 50% of the shares in Scottish Sea Farms Ltd.
See www.salmar.no for more information about the company.
This information is subject to the disclosure requirements stipulated in section
5-12 of the Norwegian Securities Trading Act.
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