SalMar ASA

Earnings Release • Nov 12, 2020

SalMar delivers strong results in the third quarter 2020 and proposes a dividend of 13 NOK per share

SalMar delivers strong results in the third quarter 2020 and proposes a dividend of 13 NOK per share

SalMar ASA reported an Operational EBIT of NOK 646.8 million in the third

quarter 2020, up from NOK 613.5 million in the same period in 2019. SalMar's

Norwegian operations reported an Operational EBIT of NOK 668.7 million in the

quarter, up 13 per cent on the same period last year.

"Fantastic efforts from our employees over time makes it possible for SalMar to

once again deliver strong quarterly results. Good strategic assessments and a

clear operational focus have led to strong biological and operational

performance throughout the entire value chain. This has resulted in good

capacity utilization, good cost development and solid price achievement with

associated margins. This in a period of increased uncertainty both for employees

and in the market caused by the Covid-19 pandemic, " says CEO Gustav Witzøe.

SalMar generated gross operating revenues of just over NOK 2.9 billion in the

quarter, up from just under NOK 2.8 billion in the third quarter last year. The

Group harvested 37,100 tonnes of salmon in the quarter, compared with 35,800

tonnes in the corresponding period last year. Operational EBIT per kg came to

NOK 17.46, up from NOK 17.12 per kg in the third quarter of 2019. The increase

was achieved despite the average spot price for salmon (NASDAQ Salmon Index)

during the period being NOK 2.08 per kg lower than in the same period last year.

The Fish Farming Central Norway segment once again posted a strong result, and

is reaping the rewards of operational efficiency and a good biological

performance. The bulk of the volume harvested in the quarter came from the

spring-2019 generation, which has now been completely harvested out. This

generation has performed very well biologically. The remaining volume harvested

came from the autumn-2019 generation, which has also performed well

biologically. The segment will continue harvesting this generation in the fourth

quarter. In the fourth quarter, the segment expects to harvest a significantly

lower volume, with production costs on a par with the third quarter.

The Fish Farming Northern Norway segment also posted a good operating profit in

the period. The entire volume harvested was made up of fish transferred to sea

farms in the spring of 2019. This generation has developed very well

biologically in recent periods. However, the segment's result was somewhat

affected by low price achievement, because harvesting took place in September

when prices were at their lowest. The segment will continue to harvest the

spring-2019 generation in the fourth quarter. It expects similar production

costs but a significantly higher harvested volume than in the third quarter.

As expected, the third-quarter result for Icelandic Salmon (formerly Arnarlax)

was weak. The result was affected by weak price achievement and high production

costs for the 2018 generation that was harvested during the period. In the

fourth quarter, the segment will start harvesting the 2019 generation, which has

performed better biologically and with a lower cost level. The segment therefore

expects to harvest a higher volume and achieve lower costs in the fourth

quarter. In October, Icelandic Salmon carried out a successful private placement

of shares worth around NOK 647 million. The company had its first day of trading

on the Merkur Market on 27(th) of October.

For the Sales and Processing segment, the third quarter was characterised by a

high level of market uncertainty due to the Covid-19 situation. Despite this,

the segment posted a strong result in the period, due to efficient operations,

good capacity utilisation and positive contributions from fixed-price contracts.

The segment made an operating profit of NOK 156 million, compared with NOK 102

million in the third quarter 2019. Some 25 per cent of the volume was sold under

contract during the quarter. The contract rate is expected to remain the same in

the fourth quarter.

The Covid-19 pandemic and the measures implemented worldwide to curb the spread

of infection have created heightened market uncertainty. However, SalMar is well

positioned to handle such crises because the company has good financial

flexibility and the capacity to process products locally before dispatching them

to customers worldwide. To date, none of SalMar's employees have tested positive

for Covid-19.

Even with the macroeconomic uncertainty affecting today's markets, SalMar is

confident in the way forward for the aquaculture industry. The board considers

that SalMar has a strong foundation on which to continue building its

operations, both in the traditional coastal fish farming sector and offshore.

The company is therefore maintaining its ongoing investment programmes to secure

development of its already robust platform for further growth. The purchase of

just over 8,000 tonnes of additional MAB capacity at the 'traffic light' auction

in August underpins SalMar's firm belief in the future of the aquaculture

industry.

In 2020 as a whole, SalMar still expects to harvest a total of 152,000 tonnes of

salmon in Norway. However, the increased MAB capacity gives it the flexibility

to adjust its harvesting profile. The expectation for Iceland remains unchanged

at 12,000 tonnes.

For 2021 as a whole, SalMar expects to harvest 163,000 tonnes in Norway and

14,000 tonnes in Iceland.

The last few quarters have proven SalMar's ability to handle demanding market

conditions by delivering strong results and maintaining a solid financial

position. Based on this, the board proposes to pay out NOK 13 per share in

dividend and will invite to an extraordinary general meeting on 4th of December

2020. The Board has updated the company's dividend policy which defines long-

term financial targets and form of dividends. The dividend proposal for the

financial year 2020 will be announced when the results for the fourth quarter of

2020 are presented. The Board considers that SalMar's financial capacity for

further growth to be strong.

The complete report and presentation for the third quarter 2020 is attached.

SalMar's CEO Gustav Witzøe and CFO & COO Trine S. Romuld will begin presenting

the company's results at 8am via a webcast on www.salmar.no

(http://www.salmar.no).

For further information, please contact:

CEO Gustav Witzøe,

Tel: +47 911 47 834

Email: gustav.witzoe@salmar.no (mailto:gustav.witzoe@salmar.no)

CFO & COO Trine Sæther Romuld,

Tel: + 47 991 63 632

Email: trine.romuld@salmar.no (mailto:trine.romuld@salmar.no)

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.