SalMar ASA

Earnings Release • Aug 27, 2020

SalMar - Results for the second quarter 2020

SalMar - Results for the second quarter 2020

SalMar ASA made an Operational EBIT of NOK 882 million in the second quarter

2020, down from NOK 990 million in the same period last year. The Group's

Norwegian operations made an Operational EBIT of NOK 912 million in the second

quarter 2020, down from 964 million in the same period in 2019.

"The SalMar Group has had another strong quarter, despite persisting turbulence

and uncertainty in the global salmon market caused by the Covid-19 pandemic.

Efficient operations and a strong biological performance at our Norwegian

operations helped to reduce costs and secure good margins," says SalMar's CEO

Gustav Witzøe.

SalMar generated gross operating revenues of just over NOK 3.3 billion in the

quarter, an increase of 0.4 per cent on the second quarter 2019. SalMar

harvested 40,900 tonnes of salmon during the quarter, compared with 41,400

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

NOK 21.56 in the second quarter 2020, down from NOK 23.90 per kg in the second

quarter last year. The decrease is largely attributable to the average spot

price in the period (NASDAQ Salmon Index) being NOK 4.85 per kg lower than in

the same period in 2019. However, the reduction in margin was dampened by lower

costs for the harvested volume.

Once again, Fish Farming Central Norway posted a strong result. The segment is

reaping the rewards of its operational focus and sound biological performance.

The generation of fish that made up the bulk of the volume harvested in the

quarter, which was transferred to the sea in the spring of 2019, has shown

strong performance and better than previous generations. Harvesting of the

generation transferred to the sea in the autumn of 2019 will commence in the

third quarter. SalMar expects Fish Farming Central Norway's costs in the third

quarter to remain at a similar level, while the volume harvested will be

slightly higher than in the second quarter.

Fish Farming Northern Norway posted a very good result. The share of the autumn-

2018 generation that was harvested in the second quarter achieved a good

biological performance and lower costs. However, price achievement was somewhat

affected by a high volume harvested early in the period, when prices were at

their lowest. Harvesting of the spring-2019 generation will get underway in the

third quarter. Due to these fish having a slightly lower level of performance,

the segment expects somewhat higher costs and a low harvest volume compared with

the second quarter.

As expected, Arnarlax had a weak second quarter. The segment suffered a high

mortality rate and high costs as a result of fish with winter wounds. At the

same time, almost 90 per cent of the volume was sold early in the quarter, when

prices were at their lowest. The low volume also resulted in weak capacity

utilisation at the harvesting plant. The affected sites have now been emptied. A

somewhat lower level of costs and a higher harvested volume is therefore

expected in the third quarter.

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

high market uncertainty as a result of the Covid-19 pandemic, as well as

volatile salmon spot prices. Despite this, the segment posted a good result in

the period, with a good allocation of spot sales and better capacity utilisation

deriving from higher volumes at the harvesting plant. At the same time, lower

spot prices resulted in a positive contribution from contract sales. The segment

made an operating profit of NOK 70 million, compared with break-even in the

second quarter 2019. Contract sales accounted for 30 per cent of the volume in

the quarter. For the third quarter and 2020 as a whole, the contract rate is 25

per cent, with prices slightly higher than in 2019.

The spread of Covid-19 and the measures implemented worldwide to halt its

transmission have created heightened market uncertainty. However, SalMar is well

positioned to handle such crises, since the company has good financial

flexibility and the capacity to further process products locally before they are

shipped to countries around the globe.

Although the future is uncertain, SalMar has great faith in the way forward for

the aquaculture industry. The company is therefore maintaining its ongoing

investment programmes to ensure the development of its already robust platform

for further growth. At a public auction in August 2020, SalMar boosted its

maximum allowable biomass (MAB) by just over 8,000 tonnes. This reflects the

company's confidence in the future of the aquaculture industry.

SalMar's board of directors considers that the company has a strong foundation

for further positive development in both traditional and offshore-based

aquaculture.

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

Norway: 103,000 tonnes in Central Norway and 49,000 tonnes in Northern Norway.

In addition, it expects to harvest some 12,000 tonnes in Iceland.

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

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

the company's results today 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.