Earnings Release • May 11, 2023
Earnings Release
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SalMar - Strong results driven by record high salmon prices
* Limited growth in supply of Atlantic salmon combined with strong demand for
healthy and nutritious food gave record high salmon prices, which resulted
in a strong start of the year for SalMar.
* Operational EBIT for the group was NOK 1,884 million in Q1 2023. Total
harvest was 48,500 tonnes. Operational EBIT per kg was NOK 38.8.
* Operational EBIT for Norway was NOK 1,725 million. Harvest volume was
42,000 tonnes, and operational EBIT per kg was NOK 41.1 per kg.
* Fish Farming Central Norway reported strong quarter with lower costs and
favourable harvest profile. Fish Farming Northern Norway delivers good
results, although partly offset by a large share of harvest volumes with
higher cost base from NRS.
* Sales and Industry showed strong underlying operational performance from its
harvesting and processing facilities, demonstrating ability to optimise
utilisation of raw materials. Contract share was 25 per cent, with negative
contribution.
* Icelandic operations achieved record-high harvest volume and continued good
results.
* Low quarterly volumes from Scottish Sea Farms with improved results compared
to previous quarter
* SalMar Aker Ocean's Ocean Farm 1 was transported back to its location at
Frohavet and started its third production cycle early May 2023.
* NTS, NRS and SalmoNor were successfully merged into SalMar's operational
structure, following the successful transactions in Q4 2022. By Q1 2023, NOK
425 million in recurring annual synergies had already been captured,
representing 63 per cent of the previously announced goal of NOK 671
million.
* Compulsory acquisition of all remaining shares in NTS completed in January
2023 and strong incoming interest for the ongoing strategic review of
ownership in Frøy ASA.
* SalMar keeps all production volume guiding for 2023 unchanged.
Limited supply growth drove the price of Atlantic salmon to record heights in
the first quarter of 2023 and resulted in solid profits for SalMar. SalMar CEO
Frode Arntsen is, however, quick to point out other achievements, which are more
important when assessing the company's performance and position, and its
capacity for growth.
"Amid great political uncertainty, our employees have done an exemplary job in
combining the businesses of SalMar, NTS, NRS and SalmoNor, and capturing
synergies. At the same time, great operational performance has been achieved
across our business, within farming as well as in sales and industry, in Iceland
and in Scotland. That is telling for the quality and commitment of the people in
our company," Mr. Arntsen said.
"Together, we are building a great platform for continued jobs and value
creation along the coast, which we hope will benefit the many communities in
which we operate, our employees and their families, and our lenders and
shareholders," he added.
Resource rent tax
Like the rest of the aquaculture industry, SalMar is deeply concerned about the
proposed new resource rent tax on Norway's fish farmers. The Norwegian
parliament, the Storting, is being invited to approve an almost threefold
increase in the marginal tax rate on a business sector that is the economic
mainstay of many coastal areas and that operates in a highly competitive global
market. The proposed increase from 22 per cent to 57 per cent is based not only
on a complicated new tax model whose repercussions have not been subject to any
proper impact assessment, but is also planned to have ex post facto effect. No
other country has imposed anything even vaguely resembling this on a part of its
food production sector, including seafood.
On this basis, SalMar has found it necessary to shelve all major new investments
in Norway going forward. The design and level of the tax proposal will impact
large parts of the coastal business community, severely curtailing investments
in land-based industry activities in particular. The Norwegian government's new
calculations underline the massive scale of the confiscation of investment
capital that the proposal will entail. This will sharply reduce opportunities to
finance future industrial projects and job creation in Norway, with investments
in other countries being correspondingly favourised. The Storting's decision
with respect to the tax proposal will, in other words, have substantial
ramifications for the Norwegian aquaculture and industrial sectors in the time
ahead. As the country's highest decision-making authority, the Storting, and the
Finance Committee on its behalf, therefore shoulder a heavy national
responsibility as they embark on their consideration of this proposal.
Outlook
SalMar expects a limited increase in global supply of Atlantic salmon in 2023
compared to 2022. SalMar keeps its harvest volume guiding for 2023 unchanged.
Harvest volume in Norway is expected at 243,000 tonnes, in Iceland 16,000
tonnes, and in Scotland 37,000 tonnes.
For the second quarter of 2023, the company expects slightly higher volume and
similar cost level in Norway. While in Iceland it is expected very low volumes.
Contract share for the second quarter and full year 2023 is expected to be
around 25% and 12%, respectively.
The complete report and presentation for the first quarter 2023 is attached
SalMar's CEO Frode Arntsen and CFO Ulrik Steinvik will present the company's
results in Hotel Continental, Stortingsgata 24-26, Oslo, Norway today at 8am
CET. The presentation will also be available on webcast on www.salmar.no
(http://www.salmar.no).
Capital Markets Day 2023
As communicated in the quarterly presentation the registration for our capital
markets day is now open. Please visit our website for more information:
www.salmar.no/en/capital-market-day/ (http://www.salmar.no/en/capital-market-
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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