SalMar ASA
Presentation Q1 2019
CEO Olav-Andreas Ervik CFO Trond Tuvstein
Agenda
- Highlights
- Operational update
- Financial update
- Outlook
Highlights
- Total operational EBIT 806 MNOK
- Harvest volume 35,500 tons
- Increased our ownership in Icelandic operator Arnarlax to 54% and further to 62% in April
- Guiding of 155,000 tons for 2019 maintained, incl. Iceland
SalMar - a fully integrated salmon farmer
TRACEABLE SUPPLY CHAIN
• Rauma strain • Central Norway • Northern Norway • Iceland (Arnarlax) • SalMar AS • Japan, Vietnam, Korea and Singapore • InnovaMar on Frøya • InnovaNor on Senja (under construction) • Essential for the performance in the entire value chain Genetics Smolt Farming Harvesting & VAP Sales
• Global span
• Vikenco at Aukra
Farming Central Norway
|
Q1 2019 |
Q1 2018 |
Operating income
(NOKm) |
1,177 |
1,376 |
Operational
EBIT (NOKm) |
473 |
531 |
Operational
EBIT % |
40.2 % |
38.6 % |
|
|
|
| Harvested volume (tgw) |
18.2 |
22.3 |
| EBIT/kg |
25.91 |
23.82 |
• Result in the period weaker than expected
- Weak biological performance
- Higher fixed cost per kg
- Autumn 2017 generation main contributor to harvest volume
- This is a generation with a spread in results from locations with very good results to locations with weaker results
- Locations with weaker results main contributor to harvest volume in the period
- Harvesting of the generation will be finished early in Q2 2019.
- Expect higher volume in Q2 2019 and a slight reduction in cost
- Guiding of 95,000 tons harvest volume in 2019 maintained
Harvest volume (1,000 tons) EBIT/kg (NOK)
Farming Northern Norway
|
Q1 2019 |
Q1 2018 |
| Operating income (NOKm) |
900 |
561 |
| Operational EBIT (NOKm) |
348 |
231 |
| Operational EBIT % |
38.7 % |
41.1 % |
|
|
|
Harvested
volume
(tgw) |
15.1 |
9.6 |
| EBIT/kg |
23.05 |
24.02 |
Harvest volume (1 000 tons) EBIT/kg (NOK)
- Result in the period weaker than expected
- High harvesting cost due to sanitary harvesting of site from ISA-zone
- Prices achieved impacted by unfavorable harvest distribution and lower average weight
- Spring 2017 generation finished harvested in the period, representing 40% of harvest volume
- Harvesting of Autumn 2017 generation started in the period with biological performance as expected
- Expect lower volume in Q2 2019 and a slight reduction in cost
- Guiding of 50,000 tons harvest volume in 2019 maintained
Sales & Processing
|
Q1 2019 |
Q1 2018 |
| Operating income (NOKm) |
2,820 |
2,524 |
| Operational EBIT (NOKm) |
14 |
-15 |
| Operational EBIT % |
0.5 % |
-0.6 % |
- Results as expected with positive contribution from all business areas
- Contract share at 26 % in the period with positive contribution
- Profitability negatively impacted by seasonal lower volumes
- Higher fixed cost per kg
- Contract share currently at 25% for Q2 2019 and 20% for FY 2019 with prices slightly up from the level in 2018
- Groundwork for InnovaNor finished during the summer, start of
Operating income (NOKm) EBIT-margin (%)
construction in the autumn with expected startup in 2021.
Arnarlax (Iceland)
|
Q1 20191 |
Q1 2018 |
|
| Operating income (NOKm) |
133 |
140 |
|
Operational
EBIT (NOKm) |
25 |
-40 |
|
Operational
EBIT % |
18.9 % |
-28.8 % |
|
|
|
|
|
| Harvested volume (tgw) |
2.1 |
2.6 |
|
| EBIT/kg |
11.77 |
-15.65 |
|
| 1) Consolidated results from February to March 2019 |
|
|
|
- Increased ownership to controlling interest in Arnarlax
- Results from Arnarlax consolidated from February 2019 with positive contribution in the period
- Improved operational performance
- Results negatively impacted by high mortality costs of 5 MNOK due to winter wounds
- Guiding of 10,000 tons harvest volume in 2019 maintained
Harvest volume (1 000 tons) EBIT/kg (NOK)
Norskott Havbruk
|
Q1 2019 |
Q1 2018 |
| Operating income (NOKm) |
405 |
519 |
| Operational EBIT (NOKm) |
109 |
173 |
Operational
EBIT % |
27,0 % |
33.4 % |
| Value adjustments biomass |
-53 |
7 |
| Profit before tax |
56 |
178 |
| SalMar's share after tax |
25 |
76 |
|
|
|
| Harvested volume (tgw) |
4.8 |
6.5 |
| EBIT/kg |
22.78 |
26.67 |
Harvest volume (1 000 tons) EBIT/kg (NOK)
- Orkney region main contributor to harvest volume with good biological performance and average weights from harvested sites
- Additional harvest volume from Scotland region
- Results negatively impacted by high mortality costs and currency effects
- Guiding of 30,000 tons harvest volume in 2019 maintained
Offshore fish farming – a new era in aquaculture
OCEAN FARM 1 – ENABLING OCEAN FARMING
• Pilot phase completed in January 2019
PILOT PHASE COMPLETED
UNDER DEVELOPMENT
- The biological results strengthen our confidence in our Ocean Strategy
- Operational experiences & learnings implemented
- Plan to release 2nd generation of smolt in August 2019
SMART FISH FARM - ENABLING OPEN OCEAN FARMING
- Awarded 8 development licenses in February 2019
- Partnering with MariCulture for the development of a semi submersible production unit
- Specifically designed for fish farming in the open ocean
- Will largely resolve current space challenges for the industry
Operational EBIT deviation analysis (qoq)
- Net sales price up NOK 5.45 per kg during the quarter
- With positive contribution from contracts
- Sales & processing profitability negatively impacted by seasonal lower volumes
- Higher fixed cost per kg
- Farming profitability negatively impacted by
- Higher farming cost and harvesting cost
- Group EBIT per kg lowered due to lower operational EBIT per kg in Iceland
Group profit and loss
| NOK million |
Q1 2019 |
Q1 2018 |
Δ% |
FY 2018 |
| Operating income |
2 963.4 |
2 531.0 |
17 % |
11 342.6 |
| EBITDA |
970.2 |
829.4 |
17 % |
3 948.6 |
| Depreciations and write-downs |
164.0 |
121.3 |
|
487.8 |
| Operational EBIT |
806.2 |
708.1 |
14 % |
3 460.8 |
| Fair value adjustment |
-172.8 |
151.6 |
|
845.8 |
| EBIT |
633.3 |
859.8 |
-26 % |
4 306.6 |
| Income from investments in associates |
28.7 |
57.5 |
|
252.9 |
| Net financial items |
189.5 |
-3.9 |
|
-107.0 |
| Net interest costs |
-37.1 |
-22.9 |
|
-105.1 |
| Other financial items |
226.5 |
19.1 |
|
-1.9 |
| Profit before tax |
851.4 |
913.4 |
-7 % |
4 452.6 |
| Tax |
139.1 |
191.8 |
|
873.3 |
| Net profit for the period |
712.3 |
721.6 |
-1 % |
3 579.2 |
| Earnings per share (NOK) |
6.38 |
6.34 |
1 % |
31.70 |
| Harvested volume (tgw) |
35.5 |
31.9 |
11 % |
142.5 |
| EBIT per kg (NOK) |
22.71 |
22.21 |
2 % |
24.29 |
Movement in net interest bearing debt
Movement in NIBD incl. IFRS 16:
Movement NIBD:
- Implementation of IFRS 16 from 1st of January
- NOK 343 million in leasing liabilities previously included in interest bearing debt
- Consolidation of Arnarlax adding NOK 371 million in NIBD
- Cash flow from operations impacted by an increase of working capital
- Net cash flow from investments at NOK -371.6 million
- Acquisition of Arnarlax NOK 175 million
- Investment of YuFish NOK 17 million
- Operating assets NOK 241 million
- MariCulture NOK 21 million
- Received dividends of NOK 83 million
- Net interest bearing debt reduced with NOK -333 million during the quarter excluding contribution from IFRS 16
Outlook
- Slight reduction in costs expected in Q2 2019
- Contract share for Q2 2019 currently around 25% with prices slightly up from level in 2018
- Construction of InnovaNor continues according to plan
- Guiding of 155,000 tons maintained for 2019, incl. Iceland
- Expect continued good demand in core markets and moderate increase in global supply
THANK YOU FOR YOUR ATTENTION
www.salmar.no