Earnings Release • Aug 26, 2021
Earnings Release
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SalMar delivers satisfactory for the second quarter and positions itself for further growth along the entire value chain
Highlights in the second quarter:
* Solid craftsmanship and good biological performance gave strong results in
both farming in Fish Farming Central Norway and Northern Norway in the
quarter
* Negative contribution from fixed-price contracts and higher costs relating
to the completion and startup of InnovaNor and the expansion at Vikenco
weakened results from Sales and Processing
* Total operational EBIT for the period (including Icelandic Salmon) totalled
NOK 661 million or NOK 18.05 per kg. Operational EBIT for Norway alone came
to NOK 633 million or NOK 18.44 per kg
* The upgrade at Vikenco has been completed while InnovaNor is close to
completion and is expected to go into operation in the fourth quarter 2021
* Good operational performance and increased price achievement improved
Icelandic Salmon's results
* SalMar maintains its expectations to harvest 163,000 tonnes in Norway and
14,000 tonnes in Iceland in 2021 as a whole
* SalMar secured financing for further sustainable growth through the
successful issue of a green bond and a private placement
* In May final investment decision was taken and construction started for the
new smolt facility in Central Norway, Tjuin
Rising salmon prices and sound operations produced satisfactory results in the
second quarter
SalMar made an Operational EBIT of NOK 661 million in the second quarter 2021,
up from NOK 627 million in the previous quarter. With a harvested volume of
36,600 tonnes, this gives an Operational EBIT per kg of NOK 18.05.
" Solid craftmanship that has given good biological performance has been the key
to the strong segment results in both Central and Northern Norway in the second
quarter. What pulls us down this quarter is the weak EBIT result from sales and
industry. At the beginning of the year, we unfortunately had a darker view of
the market and the price of salmon, which has proven to be the case. The fact
that we actually underestimated the salmon, and the market, is the main reason
why we today - overall - do not deliver a good enough result. On the positive
side, the development recently has shown us how strong the salmon market is and
we are optimistic in relation to continued strong market development going
forward," says SalMar's CEO Gustav Witzøe.
Both Fish Farming Central Norway and Fish Farming Northern Norway continue to
deliver good results, driven by stable biological performance and good price
achievement.
Sales and Industry posted a weaker result than in comparable periods, due
largely to the negative impact of fixed-price contracts at a time of rising spot
prices and non-recurring costs relating to the completion and planned startup of
the new InnovaNor harvesting plant and the expansion at Vikenco.
Icelandic Salmon continues its positive trend from the previous quarter, with
robust underlying operations, improved biological performance and good price
achievement on the salmon sold.
The SalMar Group made an Operational EBIT of NOK 1,289 million in the first six
months of 2021, compared with NOK 1,947 million in the same period last year.
The decrease is attributable primarily to a lower volume harvested in Norway in
the first quarter.
Secured capital for further sustainable growth
In April, SalMar successfully issued a senior, unsecured green bond of NOK
3,500 million, maturing on 22 January 2027. The bond was listed on the Oslo
Stock Exchange on 22 July 2021.
At the beginning of June, SalMar also completed a private placement of 4.5
million new shares, which raised gross proceeds of NOK 2,709 million
"This has given SalMar further flexibility and underpins our capacity to grow
through strategic acquisitions along the entire value chain. We are looking at
the purchase of salmon licences, acquisition of companies and organic
investments in smolt production, coastal farming, as well as harvesting and
processing activities," says CEO Gustav Witzøe.
The upgrade to Vikenco, which is SalMar's harvesting and processing facility in
Møre og Romsdal, was completed and put into operation in the second quarter. The
construction of SalMar's new harvesting and processing plant in Northern Norway,
InnovaNor, is close to completion and will be operational in the fourth quarter
this year.
In May 2021, final investment decision for the construction of a new smolt
facility in Central Norway, Tjuin, was adopted and construction has now begun.
On 1 July 2021 and 25 August 2021, SalMar announced it had acquired ownership
interest in Nekton Havbruk AS and Refsnes Laks AS which together give SalMar
5,500 tonnes of increased MAB for salmon production in Central Norway.
Offer for outstanding shares in Norway Royal Salmon
On 20 August 2021, SalMar announced that it intends to make a voluntary cash
offer to purchase all outstanding shares in Norway Royal Salmon for NOK 270 per
share.
With several overlapping industrial interests, both in Northern Norway, the West
Fjords of Iceland, and offshore, a combination offers ample opportunities to
realise significant synergies
For more information, see separate stock exchange announcement sent on 20 August
Good prospects for growth
Covid-19 continues to create market uncertainty, but the aquaculture market's
response so far has demonstrated a robust capacity to withstand the
difficulties. Combined with the rollout of vaccination programmes worldwide,
gives SalMar a positive view of the second half of 2021 and the future going
forward.
SalMar expects slightly lower costs, but a higher volume in the third quarter
than in the second quarter.
SalMar still expects to harvest 163,000 tonnes in Norway and 14,000 tonnes in
Iceland and 36,000 tonnes in Scottish Sea Farms in 2021.
The complete report and presentation for the second quarter 2021 is attached.
SalMar's CEO Gustav Witzøe and CFO & COO Trine S. Romuld will present the
company's results in the auditorium at Sparebank 1 SMNs offices in Søndre Gate
4 in Trondheim and through a webcast on www.salmar.no from 12:00 CEST. Given
current disease prevention measures due to Covid-19, it will be limited number
of seats available. For registration, please contact
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 and Vikenco in Aukra. SalMar also owns 50 per
cent of the shares in Scottish Sea Farms Ltd.
See www.salmar.no (http://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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