Earnings Release • Nov 17, 2021
Earnings Release
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In the third quarter SalMar harvests a record volume of fish with continued solid biological performance and takes strategic steps to secure further sustainable growth
Highlights in the third quarter:
* A record high volume harvested and a solid biological and operational
performance gave good results in the third quarter.
* Total Operational EBIT for the period came to NOK 743 million (NOK 14.95 per
kg) for Norway. Total Operational EBIT including Icelandic Salmon came to
NOK 748 million (NOK 14.35 per kg).
* Fish Farming Northern Norway achieved solid results, driven by a solid
biological and operational performance. Fish Farming Central Norway with
stable development and posted good results.
* Sales and Industry had record-high levels of activity at its harvesting and
processing plants, though higher costs weakened its result.
* Icelandic Salmon with stable costs, but lower spot price achievement and
non-recurring costs relating to brand and product development weakened its
result.
* SalMar is increasing its volume forecast for 2021 in Norway by 6,000 tonnes
to 169,000 tonnes as a result of strong utilisation of higher production
capacity. A higher volume is expected to be harvested in 2022: Norway,
175,000 tonnes; Iceland, 16,000 tonnes; and Scotland, 46,000 tonnes.
* Production capacity increased after the acquisition of shares in Nekton
Havbruk AS and Refsnes Laks AS, which combined have 5,500 tonnes MAB of
production capacity in Central Norway.
* InnovaNor, Northern Norway's most modern and efficient harvesting and
secondary processing plant, will go into operation from the fourth quarter
* SalMar entered a strategic partnership with the industrial investment
company Aker with the aim of creating the world's leading offshore
aquaculture company. The business will take place in the newly established
SalMar Aker Ocean, which will continue and reinforce SalMar's current
offshore aquaculture activities.
Record volume of fish harvested and solid operational performance give good
third-quarter results
SalMar made an Operational EBIT of NOK 748 million in the third quarter 2021, up
from NOK 661 million in the previous quarter. SalMar harvested a total of
52,100 tonnes, which gives an Operational EBIT per kg of NOK 14.35.
"We are particularly pleased with the results from our fish farming operations
in the quarter. As always, sound operations on the salmon's terms combined with
our employees' high level of professionalism is what has made this possible. In
the third quarter, we have also taken several important strategic steps that
will enable SalMar to continue growing. We have made strategic acquisitions in
the value chain, we are about to complete our new harvesting and processing
plant in Northern Norway, and we have embarked on a partnership with Aker which
will strengthen our offshore fish farming activities," says SalMar's CEO Gustav
Witzøe.
Fish Farming Central Norway and Fish Farming Northern Norway continue to deliver
solid results, driven by a consistently good biological performance and the
professional skills of the segments' employees. In the third quarter, the
performance is particularly impressive in Northern Norway, which achieved
materially lower costs than before.
Sales and Processing maintained a high level of activity through the quarter,
but increased costs relating to logistics and other input factors weakened the
segment's overall result.
Icelandic Salmon continues the positive development achieved in the previous
quarter, with good underlying operations. However, lower spot prices and non-
recurring costs relating to brand and product development weakened its overall
result.
The SalMar Group made an Operational EBIT of NOK 2,037 million in the first nine
months of 2021, compared with NOK 2,594 million in the same period last year.
Robust platform for further sustainable growth
For over 30 years, sustainable food production has been SalMar's hallmark, and
the company has led the way for the development of a forward-looking Norwegian
aquaculture sector. This effort continues unabated. SalMar aims to be the
leading operator within traditional coastal aquaculture as well as fish farming
in more exposed coastal areas and in the open ocean.
SalMar Aker Ocean will operate within offshore fish farming, including offshore
and semi-offshore. By combining Aker and SalMar's industry experience, leading
competence in salmon production, software, and cleantech the aim is to create
the world's most reliable and intelligent offshore farming operations with the
highest requirements for fish welfare and a zero-emissions value chain ambition.
"SalMar has considerable flexibility to realise our growth strategy, and we
continue to make strategic investments along the value chain, both coastal and
offshore, with undiminished strength. The investments we are doing create a
foundation for continued environmental, quality and financial good results in
the future," says CEO Gustav Witzøe.
Good growth outlook
Growth in demand for Atlantic salmon is expected to be moderate in 2022.
Although the Covid-19 pandemic has created market uncertainty, the first nine
months of the year have shown how robust the salmon market is. The rollout of
vaccines worldwide also gives grounds for optimism with regard to the future.
SalMar has increased its forecast for the volume to be harvested in Norway in
2021 by 6,000 tonnes to 169,000 tonnes. At the same time, it is reducing its
harvesting forecast for Iceland to 12,000 tonnes and for Scotland to 33,000
tonnes.
In the fourth quarter, costs are expected to be slightly lower and the harvested
volume higher than in the third quarter. SalMar expects a contract rate of
around 25 per cent in the fourth quarter 2021.
Further growth in the harvested volume is expected next year. In 2022, SalMar
expects to harvest 175,000 tonnes in Norway (up 6,000 tonnes), 16,000 tonnes in
Iceland (up 4,000 tonnes) and 46,000 tonnes in Scotland (up 13,000 tonnes after
the acquisition in Shetland are approved from the competition authorities).
The complete report and presentation for the third quarter 2021 is attached.
SalMar's CEO Gustav Witzøe, CFO & COO Trine S. Romuld and COO Sales and Industry
Frode Arntsen will present the company's results from InnovaNor in Senja,
Northern Norway, via a webcast on www.salmar.no. The presentation will commence
at 8am CET.
For further information, please contact:
CEO Gustav Witzøe
Tel: +47 911 47 834
Email: [email protected] (mailto:[email protected])
CFO & COO Trine Sæther Romuld
Tel: + 47 991 63 632
Email: [email protected] (mailto:[email protected])
About SalMar
SalMar is one of the world's largest and most efficient producers of farmed
salmon. The Group has farming operations in Central Norway, Northern Norway and
Iceland, as well as substantial harvesting and secondary processing operations
in Norway, at InnovaMar in Frøya, Vikenco in Aukra and InnovaNor in Senja.
SalMar also owns 50 per cent 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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