Quarterly Report • May 12, 2015
Quarterly Report
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| Highlights2 | |
|---|---|
| Summary of the 1st Quarter 2015 3 |
|
| Financial Review 4 | |
| Outlook 7 | |
| Risks9 | |
| Events after the Date of the Statement of Financial Position 9 | |
| Consolidated Income Statement 10 | |
| Consolidated Statement of Comprehensive Income 11 | |
| Consolidated Statement of Financial Position 12 | |
| Consolidated Cash Flow Statement 14 | |
| Consolidated Statement of Changes in Equity 15 | |
| Notes to the Account 16 | |
| Contacts 26 |
| Q1 | Q1 | |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| INCOME STATEMENT, SEGMENTS AND CASH FLOW | ||
| Group - Operating revenue | 613,197 | 631,311 |
| Group - Operational EBIT* | 234,871 | 185,503 |
| Group - Profit for the period | 132,425 | 87,180 |
| Operational EBIT (Farming and VAP)(DKK) | 216,848 | 176,721 |
| Operational EBIT*/kg (Farming and VAP)(DKK) | 22.30 | 19.07 |
| Operational EBIT*/kg (Farming and VAP) (NOK) | 26.12 | 21.37 |
| Farming - Operating revenue | 471,298 | 518,112 |
| Farming - Operational EBIT* | 194,984 | 186,184 |
| Farming - Operational EBIT margin | 41% | 36% |
| Farming - Operational EBIT/kg (DKK) | 20.05 | 20.09 |
| Farming - Operational EBIT/kg (NOK) | 23.49 | 22.51 |
| VAP - Operating revenue | 189,095 | 232,252 |
| VAP - Operational EBIT* | 21,864 | -9,463 |
| VAP - Operational EBIT margin | 12% | -4% |
| VAP - Operational EBIT/kg (DKK) | 4.83 | -1.62 |
| VAP - Operational EBIT/kg (NOK) | 5.66 | -1.82 |
| FOF - Operating revenue | 204,928 | 178,052 |
| FOF - EBITDA | 62,564 | 22,164 |
| FOF - EBITDA margin | 30.53% | 12.45% |
| Cash flow from operations | 81,002 | 108,339 |
| DKK/NOK (average) | 85.36 | 89.23 |
| FINANCIAL POSITION | ||
| Total Assets** | 3,609,692 | 3,462,933 |
| Equity** | 2,217,430 | 2,063,653 |
| Equity ratio** | 61% | 60% |
| Net interest bearing debt (incl. financial derivatives)** | 226,660 | 232,711 |
| PROFITABILITY | ||
| Basic earnings per share (DKK) | 2.71 | 1.78 |
| Diluted earnings per share (DKK) | 2.71 | 1.78 |
| ROE*** | 6.7% | 5.1% |
| ROCE (for the last quarter)**** | 9.2% | 7.8% |
| ROCE (for the last 4 quarters) | 34.8% | 30.5% |
| ROIC (for the last quarter)* | 8.7% | 6.9% |
| ROIC (for the last 4 quarters) | 38.8% | 38.9% |
| VOLUMES | ||
| Harvested volume (tonnes gutted weight) | 9,726 | 9,269 |
| VAP produced volume (tonnes gutted weight) | 4,525 | 5,831 |
| Sold feed tonnes | 14,400 | 13,956 |
| * Aligned for fair value adjustment of biomass, onerous contracts provisions and income from associates |
** Comparing figures from end 2014
*** Return on average equity based on profit or loss for the period
**** Return on average invested capital based on operational EBIT
***** Return on average invested capital based on EBITA
(Figures in parenthesis refer to the same period last year)
The Bakkafrost Group delivered a total operating EBIT of DKK 234.9 million in Q1 2015. The combined farming and VAP segments made an operational EBIT of DKK 216.8 million in Q1 2015. The Farming segment made an operational EBIT of DKK 195.0 million. The global salmon spot prices decreased during the quarter. Bakkafrost's VAP segment had stable market conditions and made an operational EBIT of DKK 21.9 million in Q1 2015. The EBITDA for the FOF segment was DKK 62.6 million in Q1 2015.
The Group made a profit for the quarter of DKK 132.4 million (DKK 87.2 million).
The total volumes harvested in Q1 2015 were 9,726 tonnes gutted weight (9,269 tgw) – an increase of 5%.
Bakkafrost transferred 2.2 million smolts in Q1 2015 (3.0 million), which is in line with the company's plans.
In accordance with the Group's dividend policy, Bakkafrost aims at giving its shareholders a competitive return on their investment, both through payment of dividends and by securing an increase in the value of the equity through positive operations. Bakkafrost's financial position is strong with a healthy balance sheet, a competitive operation and undrawn available credit facilities. The Annual General Meeting decided on the 11th of April 2015 to pay out DKK 6.00 (NOK 6.78) per share as dividend for 2014. This corresponds to DKK 293.1 million (NOK 331.1 million).
In Q1 2015, the associated company P/F Faroe Farming harvested 2,296 tonnes gutted weight (2,166 tgw).
The combined farming and VAP segments made an operational EBIT of DKK 216.8 million (DKK 176.7 million) in Q1 2015.
The farming segment made an operational EBIT of DKK 195.0 million (DKK 186.2 million) in Q1 2015.
The spot prices were lower in Q1 2015, compared to Q1 2014. Bakkafrost achieved higher prices, however, resulting in a better operational EBIT.
The VAP segment made an operational EBIT of DKK 21.9 million (DKK -9.5 million) for Q1 2015. There is normally a time lag between the changes in the spot prices and the changes in the contract prices. The contract prices have increased significantly from the level in Q1 2014. Therefore, the VAP result for Q1 2015 has improved, compared to last year.
The third segment – FOF (fishmeal, oil and feed), made an operational EBITDA of DKK 62.6 million (DKK 22.2 million) in Q1 2015. The increase in EBITDA is primarily due to the low purchase prices during the autumn last year.
In Q1 2015, Havsbrún sourced 75,003 tonnes of raw material (44,159 tonnes).
The Bakkafrost Group's net interest bearing debt amounted to DKK 226.7 million at the end of Q1 2015 (DKK 232.7 million at year-end 2014) includeing deposits and losses on financial deriveatives relating to the interest bearing debt. Bakkafrost had undrawn credit facilities of approximately DKK 970.8 million, of which DKK 17.8 million were restricted at the end of Q1 2015.
Bakkafrost's equity ratio is 61%, compared with 60% at the end of 2014.
| Q1 | Q1 | |
|---|---|---|
| Operational EBIT/kg harvested | 2015 | 2014 |
| Farming EBIT/kg (DKK) | 20.05 | 20.09 |
| Farming EBIT/kg (NOK) | 23.49 | 22.51 |
| VAP EBIT/kg (DKK) | 4.83 | -1.62 |
| VAP EBIT/kg (NOK) | 5.66 | -1.82 |
| FOF EBITDA/kg (DKK) | 4.34 | 1.59 |
| FOF EBITDA/kg (NOK) | 5.09 | 1.78 |
| Bakkafrost Group | |||||
|---|---|---|---|---|---|
| 1,000 pieces | 2011 | 2012 | 2013 | 2014 | 2015E |
| Farming North, salmon | 5,000 | 6,500 | 7,200 | 3,000 | 6,600 |
| Farming West, salmon | 2,600 | 4,200 | 2,300 | 7,400 | 3,800 |
| Viking | 1,000 | 0 | 0 | 0 | 0 |
| Total | 8,600 | 10,700 | 9,500 | 10,400 | 10,400 |
(Figures in parenthesis refer to the same period in last year)
The operating revenues amounted to DKK 613.2 million in Q1 2015 (DKK 631.3 million).
Operational EBIT in Q1 2015 was DKK 234.9 million (DKK 185.5 million). Improved margins in VAP and FOF segments in Q1 2015, compared with Q1 2014, resulted in an improved overall operational EBIT margin. All segments had a positive contribution in Q1 2015, while the VAP segment had a negative margin in Q1 2014.
A fair value adjustment of the Group's biological assets has been recognised in Q1 2015 amounting to DKK -54.9 million (DKK -113.8 million). The adjustment is due to lower salmon spot prices at the end of Q1 2015, compared with the beginning of the quarter.
No changes were made to the provisions of onerous contracts in Q1 2015 (DKK 70.9 million), as no contracts were onerous at the beginning and at the end of the quarter.
In Q1 2015, there was a loss from associated companies amounting to DKK -2.9 million (DKK -7.1 million).
Net interests in Q1 2015 were DKK -10.9 million (DKK -17.5 million), whereof a negative unrealised exchange rate adjustment of DKK -17.5 million related to the bond loan of NOK 500 million is posted in Q1 2015.
Net taxes in Q1 2015 amounted to DKK -33.7 million (DKK -30.8 million).
The result for Q1 2015 was DKK 132.4 million (DKK 87.2 million).
| Q1 | Q1 | |
|---|---|---|
| Harvested volumes (tgw) | 2015 | 2014 |
| Farming North | 2,541 | 321 |
| Farming West | 7,185 | 8,948 |
| Total harvested volumes (tgw) | 9,726 | 9,269 |
(Figures in parenthesis refer to the same period last year)
Bakkafrost has three operating segments: a farming segment, a segment for value added products (VAP) and a segment for fishmeal, fish oil, and fish feed production (FOF). The fresh/frozen salmon is sold in the spot market, while VAP products are sold on long-term contracts.
| Distribution of harvested | Q1 | Q1 |
|---|---|---|
| volumes (tgw) | 2015 | 2014 |
| Harvested volume used in VAP production | 46% | 55% |
| Harvested volume sold fresh/frozen | 54% | 45% |
| Harvested and purchased volumes (tgw) | 100% | 100% |
Of the total harvested volumes in Q1 2015, 46% (55%) went for the production of VAP products, and 54% (45%) were sold as whole gutted salmon.
In Q1 2015, the operating revenue for Bakkafrost's farming segment was DKK 471.3 million (DKK 518.1 million).
Operational EBIT, which is EBIT before fair value adjustments on biological assets, provisions for onerous contracts and income from associates, amounted to DKK 195.0 million in Q1 2015 (DKK 186.2 million).
Operational EBIT/kg for the farming segment was DKK 20.05 (NOK 23.49) in Q1 2015, compared with DKK 20.09 (NOK 22.51) in Q1 2014.
The operating revenue for the VAP segment amounted to DKK 189.1 million (DKK 232.3 million) in Q1 2015. The decrease in revenue in Q1 2015, compared with Q1 2014, is 19%, while the sold volumes in VAP decreased 22%. Thus, the contract prices were higher in Q1 2015 than in Q1 2014.
Operational EBIT amounted to DKK 21.9 million (DKK -9.5 million) in Q1 2015, corresponding to an operational EBIT of DKK 4.83 (NOK 5.66) per kg gutted weight in Q1 2015, compared with DKK -1.62 (NOK -1.82) per kg gutted weight in Q1 2014. The increase in the operational EBIT margins is due to higher contract prices and lower salmon spot prices. The VAP segment purchases its raw material (fresh salmon) at spot prices each week.
The operating revenue for the FOF segment amounted to DKK 205.0 million (DKK 178.1 million) in Q1 2015, of which DKK 122.0 million (DKK 92.9 million) represents sales to Bakkafrost's farming segment, corresponding to 59.5% (52.2%).
Operational EBITDA was DKK 62.6 million (DKK 22.2 million) in Q1 2015, and the operational EBITDA margin was 30.53% (12.45%). The margin reflects the favourable development in raw material prices. Havsbrún sources raw pelagic fish for the fishmeal and fish oil production, which are part of the recipe for the production of salmon feed. The raw fish was purchased in Q3 2014 and Q4 2014, while the production and sale of the salmon feed took place in Q1 2015.
Sales of feed amounted to 14,400 tonnes (13,956 tonnes) in Q1 2015, of which the farming segment internally used 12,410 tonnes (10,598 tonnes).
In Q1 2015, Havsbrún received 75,003 tonnes (44,159 tonnes) of raw material for the production of fishmeal and fish oil. In general, the raw material intake depends on the available quotas and catch of pelagic fish species in the North Atlantic.
The production of fishmeal in Q1 2015 was 15,288 tonnes (10,014 tonnes).
The production of fish oil in Q1 2015 was 2,148 tonnes (1,268 tonnes). The production of fishmeal and fish oil varies, depending on the species of fish sourced for production.
Condensed Consolidated Interim Report for Q1 2015 Issued May 12th 2015
(Figures in parenthesis refer to end last year)
The Group's total assets as at end Q1 2015 amounted to DKK 3,609.7 million, compared with DKK 3,462.9 million at the end of 2014.
The Group's intangible assets are unchanged, compared to the beginning of the year, and amounted to DKK 294.7 million. Intangible assets comprise primarily the fair value of acquired farming licences. No licences in the North region are recorded with a value in the Bakkafrost accounts.
Property, plant and equipment amounted to DKK 1,121.5 million at the end of Q1 2015, compared with DKK 1,041.2 million at the end of 2014. In Q1 2015, Bakkafrost made investments in PP&E amounting to DKK 106.5 million, compared with DKK 17.7 million in Q1 2014.
Non-current financial assets amounted to DKK 123.6 million at the end of Q1 2015, compared with DKK 125.4 million at the end of 2014.
Long-term receivables amounted to DKK 1.3 million at end Q1 2015 (DKK 1.3 million).
The Group's carrying amount (fair value) of biological assets amounted to DKK 974.3 million at the end of Q1 2015, compared with DKK 1,014.0 million at the end of 2014. Included in the carrying amount of the biological assets is a fair value adjustment amounting to DKK 229.9 million, compared with DKK 284.9 million at the end of 2014. The decrease is due to lower salmon prices at the end of Q1 2015, compared to end 2014.
The Group's total inventories amounted to DKK 407.2 million as at end Q1 2015, compared with DKK 267.0 million at year-end 2014. The inventory primarily represents Havsbrún's inventory of fishmeal, fish oil and fish feed in addition to feed at the feed stations, finished products, packing materials and other raw materials.
The Group's total receivables amounted to DKK 182.4 million as at end Q1 2015, compared with DKK 172.4 million at the end of 2014.
The Group's equity at the end of Q1 2015 is DKK 2,217.4 million, compared with DKK 2.063,7 million at the end of 2014. The change in equity consists primarily of the positive result for the period and a positive fair value adjustment to a currency-/interest rate swap related to the bond financing.
The Group's total non-current liabilities amounted to DKK 1,043.6 million at the end of Q1 2015, compared with DKK 1,036.3 million at the end of 2014.
Deferred taxes at the end of Q1 2015 amounted to DKK 451.5 million, compared with DKK 414.0 million at the end of 2014.
Long-term debt was DKK 501.1 million at the end of Q1 2015, compared with DKK 505.4 million at the end of 2014. Derivatives amounted to DKK 91.1 million at the end of Q1 2015, compared with DKK 116.9 million at the end of 2014.
Bakkafrost's interests bearing debt consists of two bank loans and a bond loan. The bank loans are an instalment loan of DKK 175 million, payable with DKK 25 million each quarter, and an overdraft facility, payable in 2016 with the full amount of DKK 553 million. The bond loan of NOK 500 million has a fiveyear maturity and is payable 14 February 2018. The interest rate of the bonds is NIBOR 3m + 4.15%. Following the issuance of the bonds, Bakkafrost has entered into a currency/-interest rate swap, hedging the exchange rate, and has switched the interest rate from NIBOR 3m to CIBOR 3m. Bakkafrost has entered the swap due to its exposure to DKK, as a large part of the income and costs are in DKK and EUR.
At the end of Q1 2015, the Group's total current liabilities are DKK 348.6 million, compared with DKK 362.9 million at the end of 2014. Short-term interest bearing debt amounts to DKK 100.0 million and relates to a short-term part of long-term debt as described above. Accounts payable amount to DKK 248.6 million, compared with DKK 262.9 million at the end of 2014.
Bakkafrost's equity ratio is 61%, compared with 60% at the end of 2014.
(Figures in parenthesis refer to the same period in last year)
The cash flow from operations in Q1 2015 was DKK 81.0 million (DKK 108.3 million).
The cash flow from investment activities in Q1 2015 amounted to DKK -106.5 million (DKK -34.2 million). The increase relates mainly to investments in the new VAP and harvesting plant and in the new wellboat.
Cash flow from financing activities totalled DKK 35.2 million in Q1 2015 (DKK -12.7 million). The interest bearing debt decreased by DKK 4.3 million
The global demand growth in the salmon market has increased during the last years due to high growth rate in emerging markets and a stable growth in other markets. A market balance seems to request a yearly supply growth around 9%.
Global supply growth is expected to be limited in 2015 to around 4-5% and only 2-3% in 2016. Production capacity is close to full utilization and further expansion is related to high investments.
Both established and new markets show an increased demand for farmed salmon. The outlook for 2015 is favourable for the salmon farming industry as a limited supply growth and a strong demand is expected. The Russian ban on Norwegian salmon implemented in August 2014 gave temporary challenges to move volumes between different markets. Going forward we expect the global market to adapt better to the new market balance.
The market place is one of Bakkafrost's most significant risk areas. Bakkafrost has a geographical and a market price approach. These approaches reduce the exposure to the market risk. To diversify the geographical market risk, Bakkafrost sells its products to some of the largest salmon markets in the world, US, the Far East, Europe and Russia.
The outlook for the farming segment is good. Biology and veterinary situation is the most important risk area for Bakkafrost. The company is focusing on this risk with new investments and procedures to minimise the risk. The biological situation is good, and the price outlook in the spot market continues to be positive.
and financing of an associated company contributed positively with DKK 47.1 million.
Net change in cash flow in Q1 2015 amounted to DKK 9.7 million (DKK 61.4 million).
At the end of Q1 2015, Bakkafrost had unused credit facilities of approximately DKK 970.8 million of which DKK 17.8 million are restricted.
Bakkafrost expects to harvest 49,000-51,000 tonnes gutted weight in 2015. Faroe Farming, a company in which Bakkafrost holds 49%, expects to harvest around 4,500 tonnes in 2015.
The number of smolts released is one key element of predicting the future production for the Group. Bakkafrost forecasts a release of 10.4 million smolts in 2015, compared with the 9.5 million smolts released in 2013, as the same sites are available for smolt release.
The estimates for harvesting volumes and smolt releases are as always dependent on the biological situation. The sea temperature was higher in 2014 than previous years. Bakkafrost will start using cleaner fish (lumpfish) in the first half of 2015 on two farming locations. This is a project together with Fiskaaling, which is an aquaculture research station in the Faroe Islands. Bakkafrost will also start using fresh water treatment against sea lice, when the new wellboat is delivered in June 2015.
The outlook for sales of value added products is good. Bakkafrost has signed contracts covering around 80% of the VAP capacity for the rest of 2015. This corresponds to around 30% of the expected harvested volumes for the rest of 2015. The remaining 20% of the VAP capacity is expected to be committed during the year. The VAP contracts are at fixed prices, based on the salmon forward prices at the time they are agreed and the expectations for the salmon spot price for the contract period.
The contracts last for 6 to 12 months. The long-term strategy is to sell around 40-50% of the harvested volumes of salmon as VAP products on fixed price
contracts. Selling the products at fixed prices reduces the financial risk with fluctuating salmon prices. The market price for contracted VAP products follows a more stable pattern with trends instead of short-term fluctuations as in the spot market.
The outlook for the production of fishmeal and fish oil has improved as the available raw material for the production has increased. The quotas for catching blue whiting in the North Atlantic have increased.
Bakkafrost is one of the founders of Pelagos, a new pelagic plant built next to Havsbrún. The operation is to process pelagic fish for human consumption. This process contributes to increase the sustainability of our total operation, as Havsbrún will use an increased share of offcuts from pelagic fish to produce salmon feed.
With increased quotas, Bakkafrost is optimistic, that the raw materials needed for our production of high quality salmon feed will be available.
Depending on supply, demand and the price level, however, the sourcing of raw material for the production of fishmeal and fish oil may be uncertain. An alternative to Havsbrún's production of fishmeal and fish oil is purchasing these raw materials from other producers. Fishmeal and fish oil are the most important raw materials in the production of a high quality fish feed for the Bakkafrost salmon.
The major market for Havsbrún´s fish feed is the local Faroese market, including Bakkafrost's internal use of fish feed.
Depending on the purchase from external customers, sales of fish feed will be 83,000-87,000 tonnes.
Bakkafrost has announced an investment plan for the period until 2017, latest updated in August 2014. The purpose of the investment plan is to continue to have one of the most costs efficient value chains in the farming industry, carry out organic growth, increase flexibility and reduce the biological risk to meet the future consumers' trends and to be more end-customer orientated.
The total investments for the period 2014-2017 were announced to be DKK 1,370 million including maintenance CAPEX. The future investments over the next three years will be DKK 1,120 million. Included in the investment plan, is a new harvest/- VAP factory estimated to DKK 450 million, resulting in operational savings of DKK 70-90 million per year from 2017. The plant will be up running in 2016.
Bakkafrost plans to increase the smolt capacity, making Bakkafrost self-supplied with smolts at a size of 200-300g each before end 2017. The benefits are shorter production time at sea as well as reduced biological risk. As part of this plan, the expansion of one existing hatchery started early 2015. The expansion will fourfold the capacity of this hatchery, which will be finished within one year.
A new 3,000 m3 wellboat is under construction and was planned for delivery 25 April 2015. The delivery is postponed six weeks due to the installation of a fresh water treatment system. The delivery will be on 12 June 2015. The investment in the wellboat amounts to DKK 230 million.
Free cash flow from operations, existing financing facilities and partly new financing if advantageous will finance the investments. In addition, Bakkafrost has the possibility to postpone investments in case of adverse events. The dividend policy will be unchanged.
Improved market balances in the world market for salmon products and costs effective production will likely improve the financial flexibility going forward. A high equity ratio together with the Group's bank financing and the issuance of bonds makes Bakkafrost's financial situation strong. This enables Bakkafrost to carry out its investment plans to further focus on strengthening the Group, M&A's, organic growth opportunities and fulfil its dividend policy in the future.
Bakkafrost has not identified any additional risk exposure beyond the risks described in the 2014 Annual Report.
The 2014 Annual Report is available on request from Bakkafrost and on Bakkafrost's website, www.bakkafrost.com.
Bakkafrost is, as explained in the 2014 Annual Report, exposed to the salmon price. A limited increase in supply is expected in 2015 and therefore a balanced salmon market in 2015.
References are made to the Outlook section of this report for other comments to Bakkafrost's risk exposure and to Note 3.
From the date of the statement of financial position until today, no events have occurred which materially influence the information provided by this report.
Glyvrar, May 12th 2015
The Board of Directors of P/F Bakkafrost
For the period ended 31 March 2015
| Q1 | Q1 | |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| Operating revenue | 613,197 | 631,311 |
| Purchase of goods | -304,084 | -230,893 |
| Change in inventory and biological assets (at cost) | 167,919 | 15,223 |
| Salary and personnel expenses | -64,075 | -61,678 |
| Other operating expenses | -151,834 | -145,886 |
| Depreciation | -26,252 | -22,574 |
| Operational EBIT * | 234,871 | 185,503 |
| Fair value adjustments on biological assets | -54,936 | -113,780 |
| Onerous contracts | 0 | 70,886 |
| Income from associates | -2,867 | -7,097 |
| Earnings before interest and taxes (EBIT) | 177,068 | 135,512 |
| Net interest revenue | 934 | 599 |
| Net interest expenses | -7,739 | -8,537 |
| Net currency effects | -2,571 | -8,451 |
| Other financial expenses | -1,536 | -1,123 |
| Earnings before taxes (EBT) | 166,156 | 118,000 |
| Taxes | -33,731 | -30,820 |
| Profit or loss for the period | 132,425 | 87,180 |
| Profit or loss for the year attributable to | ||
| Non-controlling interests | 0 | 0 |
| Owners of P/F Bakkafrost | 132,425 | 87,180 |
| Earnings per share (DKK) | 2.71 | 1.78 |
| Diluted earnings per share (DKK) | 2.71 | 1.78 |
*EBIT before fair value on biomass, onerous contracts and income from associates.
For the period ended 31 March 2015
| Q1 | Q1 | |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| Profit for the period | 132,425 | 87,180 |
| Fair value adjustment on financial derivatives | 25,022 | 10,354 |
| Income tax effect | -3,817 | -1,579 |
| Reserve to share based payment | 186 | 0 |
| Currency translation differences | -130 | -393 |
| Net other comprehensive income to be reclassified to profit or loss in subsequent periods |
21,261 | 8,382 |
| Proceeds/Acquisitions of treasury shares | 91 | 0 |
| Net other comprehensive income not to be reclassified to profit or loss in subsequent periods |
91 | 0 |
| Other comprehensive income | 21,352 | 8,382 |
| Total other comprehensive income for the period | 153,777 | 95,562 |
| Comprehensive income for the period attributable to | ||
| Non- controlling interests | 0 | 0 |
| Owner of P/F Bakkafrost | 153,777 | 95,562 |
As at 31 March 2015
| 31 March | End | |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | 294,675 | 294,675 |
| Property, plant and equipment | 1,121,493 | 1,041,248 |
| Financial assets | 123,605 | 125,419 |
| Long term receivables | 1,314 | 1,291 |
| Total non-current assets | 1,541,087 | 1,462,633 |
| Current assets | ||
| Biological assets (biomass) | 974,351 | 1,013,959 |
| Inventory | 407,220 | 266,960 |
| Total inventory | 1,381,571 | 1,280,919 |
| Accounts receivable | 182,449 | 172,360 |
| Other receivables | 89,734 | 141,912 |
| Total receivables | 272,183 | 314,272 |
| Cash and cash equivalents | 414,851 | 405,109 |
| Total current assets | 2,068,605 | 2,000,300 |
| TOTAL ASSETS | 3,609,692 | 3,462,933 |
As at 31 March 2015
| 31 March | End | |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Share capital | 48,858 | 48,858 |
| Other equity | 2,168,572 | 2,014,795 |
| Total equity | 2,217,430 | 2,063,653 |
| Non-current liabilities | ||
| Deferred taxes | 451,452 | 414,014 |
| Long-term interest bearing debts | 501,131 | 505,393 |
| Financial derivatives | 91,069 | 116,928 |
| Total non-current liabilities | 1,043,652 | 1,036,335 |
| Current liabilities | ||
| Short-term interest bearing debt | 100,000 | 100,000 |
| Accounts payable and other debt | 248,610 | 262,945 |
| Total current liabilities | 348,610 | 362,945 |
| Total liabilities | 1,392,262 | 1,399,280 |
| TOTAL EQUITY AND LIABILITIES | 3,609,692 | 3,462,933 |
For the period ended 31 March 2015
| Q1 | Q1 | |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| Earnings before interest and taxes (EBIT) | 177,068 | 135,512 |
| Adjustments for write-downs and depreciation | 26,252 | 22,574 |
| Adjustments for value adjustments on biomass | 54,936 | 113,780 |
| Adjustments for income from associates | 2,867 | 7,097 |
| Adjustments for currency effects* | -2,571 | -8,451 |
| Provision for onerous contracts | 0 | -70,886 |
| Change in inventory | -155,588 | -5,943 |
| Change in receivables | -6,372 | 14,314 |
| Change in current debts | -15,590 | -99,658 |
| Cash flow from operations | 81,002 | 108,339 |
| Cash flow from investments | ||
| Payments made for purchase of fixed assets | -106,497 | -17,680 |
| Sale/Purchase of shares | 0 | -16,549 |
| Cash flow from investments | -106,497 | -34,229 |
| Cash flow from financing | ||
| Change of interest bearing debt (short and long) | -4,262 | -66,082 |
| Financial income* | 934 | 599 |
| Financial expenses | -9,275 | -9,660 |
| Sales/acquisitions of treasury shares | 693 | 0 |
| Financing of associate | 47,147 | 62,458 |
| Cash flow from financing | 35,237 | -12,685 |
| Net change in cash and cash equivalents in period | 9,742 | 61,425 |
| Cash and cash equivalents – opening balance | 405,109 | 182,077 |
| Cash and cash equivalents – closing balance total | 414,851 | 243,502 |
As at 31 March 2015
| DKK 1,000 | Share Capital |
Share Premium Reserve |
Treasury Shares |
Share- Based Payment |
Currency translation differences |
Derivatives | Proposed Dividend |
Biomass Fair value adjust- ments |
Retained Earnings |
Total Equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Equity 01.01.2015 | 48,858 | 306,537 | -25,557 | 161 | 1,458 | -95,882 | 293,148 | 284,855 | 1,250,075 | 2,063,653 |
| Consolidated profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -54,936 | 187,361 | 132,425 |
| Other comprehensive income: | ||||||||||
| Fair value adjustment on financial derivatives | 0 | 0 | 0 | 0 | 0 | 25,022 | 0 | 0 | 0 | 25,022 |
| Income tax effect | 0 | 0 | 0 | 0 | 0 | -3,817 | 0 | 0 | 0 | -3,817 |
| Share based payment | 0 | 0 | 0 | 186 | 0 | 0 | 0 | 0 | 0 | 186 |
| Currency translation differences | 0 | 0 | 0 | 0 | -130 | 0 | 0 | 0 | 0 | -130 |
| Total other comprehensive income | 0 | 0 | 0 | 186 | -130 | 21,205 | 0 | 0 | 0 | 21,261 |
| Total comprehensive income | 0 | 0 | 0 | 186 | -130 | 21,205 | 0 | -54,936 | 187,361 | 153,686 |
| Transaction with owners: | ||||||||||
| Treasury shares | 0 | 0 | 186 | 0 | 0 | 0 | 0 | 0 | 0 | 186 |
| Paid-out dividend | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Proposed dividend | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total transaction with owners | 0 | 0 | 186 | 0 | 0 | 0 | 0 | 0 | 0 | 186 |
| Total changes in equity | 0 | 0 | 186 | 186 | -130 | 21,205 | 0 | -54,936 | 187,361 | 153,872 |
| Total equity 31.03.2015 | 48,858 | 306,537 | -25,371 | 347 | 1,328 | -74,677 | 293,148 | 229,919 | 1,437,436 | 2,217,525 |
| Equity 01.01.2014 | 48,858 | 306,537 | -28,949 | 0 | 1,109 | -61,409 | 219,862 | 296,402 | 882,867 | 1,665,277 |
| Consolidated profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 113,780 | -26,600 | 87,180 |
| Other comprehensive income: | ||||||||||
| Fair value adjustment on financial derivatives | 0 | 0 | 0 | 0 | 0 | 10,354 | 0 | 0 | 0 | 10,354 |
| Income tax effect | 0 | 0 | 0 | 0 | 0 | -1,579 | 0 | 0 | 0 | -1,579 |
| Share based payment | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Currency translation differences | 0 | 0 | 0 | 0 | -393 | 0 | 0 | 0 | 0 | -393 |
| Total other comprehensive income | 0 | 0 | 0 | 0 | -393 | 8,775 | 0 | 0 | 0 | 8,382 |
| Total comprehensive income | 0 | 0 | 0 | 0 | -393 | 8,775 | 0 | 113,780 | -26,600 | 95,562 |
| Transaction with owners: | ||||||||||
| Treasury shares | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Paid-out dividend | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Proposed dividend | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total transaction with owners | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total changes in equity | 0 | 0 | 0 | 0 | -393 | 8,775 | 0 | 113,780 | -26,600 | 95,562 |
| Total equity 31.03.2014 | 48,858 | 306,537 | -28,949 | 0 | 716 | -52,634 | 219,862 | 410,182 | 856,267 | 1,760,839 |
Condensed Consolidated Interim Report for Q1 2015 Issued May 12th 2015
P/F Bakkafrost is a limited company incorporated and domiciled in the Faroe Islands.
The Group's Annual Report as at 31st December 2014 is available upon request from the company's
This Condensed Consolidated Interim Report has been prepared in accordance with International Financial Reporting Standards (IFRS) IAS 34 Interim Financial Reporting as adopted by the EU. It does not include all of the information required for the full Annual and Consolidated Report and Accounts and should be read in conjunction with the
The accounting policies applied by the Group in this Condensed Consolidated Interim Report are the same as those applied in the Annual Report as at and for the year ended 31st December 2014.
The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting principles and recognized amounts of assets, liabilities, income and expenses. The most significant estimates relate to the valuation of biological assets and some financial instruments, which are measured at fair value. Estimates and underlying assumptions are reviewed on an on-going basis and are based on the management's best assessment at the time of reporting. All changes in estimates are reflected in the financial statements as they occur.
registered office at Bakkavegur 9, FO-625 Glyvrar, Faroe Islands, or at www.bakkafrost.com.
This Condensed Consolidated Interim Report is presented in DKK.
Annual and Consolidated Report and Accounts for the Group as at 31st December 2014.
This interim report has not been subject to any external audit.
The company has, nevertheless, chosen to reproduce the note on intangible assets from the Annual Report 2014. The information in the note is enlarged.
The accounting estimates are described in Note 3 to the financial statements in the Annual Report 2014.
For other risk exposures, reference is made to the Management Statement in the Annual Report for 2014, where Bakkafrost's operational and financial risks are described, as well as to Note 22 (Financial risk management) in the same report.
The risks and uncertainties described therein are expected to remain.
| Q1 | End | |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| Biological assets carrying amount 01.01. | 1,013,959 | 965,895 |
| Increase due to production or purchases | 251,825 | 1,106,337 |
| Reduction due to harvesting or sale (costs of goods sold) | -220,765 | -1,029,122 |
| Fair value adjustment at the beginning of the period reversed | -284,855 | -296,402 |
| Fair value adjustments at the end of the period | 229,920 | 284,855 |
| Reversal of elimination at the beginning of the period | 51,342 | 33,738 |
| Eliminations | -67,076 | -51,342 |
| Biological assets carrying amount at the end of the period | 974,350 | 1,013,959 |
| Cost price biological assets | 792,333 | 764,675 |
| Capitalised interest | 19,173 | 15,771 |
| Fair value adjustments at the end of the period | 229,920 | 284,855 |
| Eliminations | -67,076 | -51,342 |
| Biological assets carrying amount | 974,350 | 1,013,959 |
| Biomass < 1 kg on average (tonnes live weight) | 2,265 | 1,834 |
| Biomass 1 kg < 4 kg on average (tonnes live weight) | 10,716 | 11,194 |
| Biomass > 4 kg on average (tonnes live weight) | 22,484 | 22,463 |
| Volume of biomass at sea (tonnes live weight) | 35,465 | 35,491 |
| Numbers of fish < 1 kg on average (thousand) | 5,859 | 5,055 |
| Numbers of fish 1 kg < 4 kg on average (thousand) | 4,649 | 4,948 |
| Numbers of fish > 4 kg on average (thousand) | 3,913 | 4,537 |
| Total numbers of fish (thousand) | 14,421 | 14,540 |
Intangible assets, that are purchased individually, are capitalised at acquisition cost. Intangible assets acquired in connection with the purchase of a business entity are capitalised at acquisition cost when the criteria for separate recognition are met.
Intangible assets with a limited economic lifespan are depreciated systematically. Intangible assets are written down to the recoverable amount if the expected financial benefits do not cover their carrying amount.
Costs relating to research and development are charged as expenses as they accrue. R&D costs are capitalised in the statement of financial position, when it can be demonstrated that the relevant R&D projects carry economic benefits, that they can be technically finalised, and that the company intends to and is financially able to reap the economic benefits.
Capitalised R&D costs are recognised at acquisition cost less accumulated depreciation and writedowns. Capitalised R&D costs are depreciated in a straight line over the asset's estimated period of use.
Sea farming licences, which are purchased either as part of an acquisition or business combination according to IFRS 3, are capitalised at cost less accumulated write-downs. Sea farming licences in the Faroe Islands are considered perpetual, given that certain preconditions regarding environmental protection and animal welfare are met. Consequently, sea farming licences are not depreciated systematically, but are subject to an annual impairment test. If the carrying amount exceeds the recoverable amount, licences are considered impaired, and write-downs are entered and charged to the Income Statement.
The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be appropriate. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Bakkafrost operates its sea farming activity in 13 identifiable CGUs based on single or groups of sea farming licenses.
Seven out of these licenses are issued by the government without consideration, and hence are not capitalised. These belong to the North region.
The other six CGUs are acquired as part of business combinations. Respectively, when acquiring the Vestlax Group and the Havsbrún Group, hence two groups of CGUs. These are belonging to the West region. Bakkafrost considers these as significant in comparison to Bakkafrost's total carrying amount of goodwill and intangible assets with indefinite useful lives. Bakkafrost has decided to disclose specific information concerning these two groups of CGUs.
The sea farming licenses in the Faroe Islands are defined as the right to utilise a given area of fjords for farming fish. There are no provisions as to the maximum allowed biomass at the given site, but the legislation has imposed strict measures to regulate the farming activity in order to be environmentally sustainable.
The sea farming licenses are issued with a nominal lifespan of 12 years. Licenses are renewed, unless there is a specific reason against renewal, based on failure to fulfil the veterinary conditions set by the authorities. In connection with renewal of licenses, authorities may only decline renewal if specific legislation on area planning, animal welfare or environmental protection is in conflict with renewal of the licenses. Special emphasis is to be placed on the fact, that it is renewals of existing licenses.
This actually means that sea farming licenses are operated in a 12-year rolling lifespan system, where the licenses are renewed every 12th year. In the very rare cases, where the authorities have declined to renew licenses in order the use locations for other purposes, the farmers have obtained licenses from the authorities at other locations.
Bakkafrost has therefore decided to account for sea farming licenses, which are capitalised, following the provisions for intangible rights with indefinite useful lives.
When the company assumes control over a separate business entity for a consideration that exceeds the fair value of the individual assets, the difference is entered as goodwill in the statement of financial position.
Goodwill deriving from purchases of subsidiaries and associates is presented under intangible assets.
Goodwill is not depreciated, but is tested for impairment annually or more often if there are indications that its value is lower than the carrying amount. When assessing the need to write-down goodwill, this is assigned to relevant cash flow generating
units or groups, which are expected to benefit from the acquisition.
Write-downs are performed in accordance with an assessment of the recoverable value of each of the cash-flow generating units to which the goodwill is assigned. To identify the Group's cash-flow generating units, the assets are grouped according to the lowest level to which separate and independent cash flows may be ascribed. Recoverable value is calculated on the basis of value in use. This is arrived at by estimating future cash flows. Please refer to Note 9 for further description.
If the calculated value in use is less than the carrying amount of the cash-flow generating unit, goodwill is written down first, and then other assets as required.
| DKK 1,000 | Goodwill | Licences | TOTAL |
|---|---|---|---|
| Acquisition costs as at 01.01.15 | 4,537 | 290,138 | 294,675 |
| Acquisition costs as at 31.03.15 | 4,537 | 290,138 | 294,675 |
| Impairment 01.01.15 | 0 | 0 | 0 |
| Accumulated depreciation and write-downs as at 31.03.15 | 0 | 0 | 0 |
| Net book value as at 31.03.15 | 4,537 | 290,138 | 294,675 |
| Acquisition costs as at 01.01.14 | 4,537 | 290,138 | 294,675 |
| Acquisition costs as at 31.12.14 | 4,537 | 290,138 | 294,675 |
| Impairment 01.01.14 | 0 | 0 | 0 |
| Accumulated depreciation and write-downs as at 31.12.14 | 0 | 0 | 0 |
| Net book value as at 31.12.14 | 4,537 | 290,138 | 294,675 |
The Group tests intangible assets annually for impairment, or more frequently if there are indications that the assets are impaired. The annual impairment test is performed at year-end. Bakkafrost has substantial assets with indefinite lives in the form of licenses. The licenses are subject to impairment testing in combination with goodwill in the annual test. Bakkafrost identifies each faming zone, which may contain one or a number of licences or farming sites as one cashgenerating unit.
Impairment testing is carried out by calculating the net present value of estimated future cash flows (value in use) for the cash-generating unit, in line with IAS 36, and comparing the net present value of the cash flow towards the carrying amount of net assets held by the cash-generating unit (CGU). The cash flow used in the calculations represents the management's best estimate at the time of reporting. If the carrying amount is higher than the calculated value in use, the assets are considered impaired. The estimated cash flow is based on the assumption of continued operation. The basis for the estimated cash flow is the strategic plan for the following years. The strategic plans have been reviewed and the targets approved by the Group management.
All CGUs have the same operating assumptions since the operating conditions are predominantly the same all over the Faroe Islands. The considered operating conditions are costs of feed, smolt, harvest, packaging, transport and other costs. Other operating conditions considered the same are mortality, production time, fallowing and harvest weight. CAPEX is also assumed to be the same for all CGUs over the calculated period. All CGUs are calculated with the same WACC. If there will be variances between the assumptions for the different CGUs in the future, this will be incorporated into the impairment test.
The impairment testing at year-end did not result in identification of impairment losses. Intangible assets were tested for impairment to evaluate if the cash flow from a conservative estimate was sufficient to support the carrying amount of net assets. The test confirmed the asset values.
The key assumptions in the calculations of value in use are harvest volume, prices and costs, hence EBIDTA and WACC. Amongst other assumptions are inflation, CAPEX and terminal growth.
In general, the value in use has been determined based on future strategic plans considering the expected development in both macroeconomic and company-related conditions.
The assumptions used rest on uncertainty with regard to product prices, input prices, biological performance and future regulatory frameworks. Costs can normally be estimated with a higher degree of accuracy than income. As profitability in the salmon farming industry historically has been very volatile, depending on developments in the prices of salmon. Bakkafrost uses budgets and long-term plans for the first five years of the analysis, but returns to long-term historic averages for profitability in the sixth year and terminal period.
The key assumptions used in determining the value in use are:
where available (interest, inflation, beta). The discount rate is based on a five-year average for tenyear bonds issued by the Danish government, with an adjustment margin for the food industry in the EU.
In connection with the impairment testing of intangible assets, a sensitivity analysis has been carried out. Sensitivity analysis has been performed for each of the defined cash generating units. With the assumptions used, the headroom is 511 mDKK.
The CGUs tested are in the West region.
| CGUs (1,000) | Licenses | Other assets*** |
Total booked value tested |
WACC | Number of smolts |
EBITDA change of +/-1% |
WACC change of -1% |
WACC change of + 1% |
|---|---|---|---|---|---|---|---|---|
| Vestlax acquisition* | 132,706 | 526,116 | 658,822 | 10.8% | 6,400 | 65,564 | 181,995 | -102,513 |
| Havsbrún acquisition** | 157,430 | 231,021 | 388,451 | 10,8% | 2,800 | 28,685 | 55,106 | -72,189 |
| TOTAL | 290,136 | 757,137 | 1,047,273 | 10.8% | 9,200 | 94,249 | 237,101 | -174,702 |
CGUs (1,000)
| Vestlax acquisition* | 132,706 | 519,379 | 652,085 | 9.8% | 6,300 | 71,368 | 249,576 | -181,175 |
|---|---|---|---|---|---|---|---|---|
| Havsbrún acquisition** | 157,430 | 176,818 | 334,248 | 9.8% | 2,100 | 23,790 | 83,207 | -60,406 |
| TOTAL | 290,136 | 696,197 | 986,333 | 9.8% | 8,400 | 95,158 | 332,783 | -241,581 |
* 4 CGUs in license numbers A03, A05, A06, A25, A80 and A81. Acquired in 2010.
** 2 CGUs in license number A71 and A82. Acquired in 2011.
*** Other assets consist of goodwill, PP&E, inventory, receivables, etc. that can be allocated to CGUs or are directly attributable to CGUs.
| Farming segment | Q1 | Q1 |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| External revenue | 341,190 | 313,955 |
| Internal revenue | 130,108 | 204,157 |
| Total revenue | 471,298 | 518,112 |
| Operating expenses | -259,202 | -317,397 |
| Depreciation and amortisation | -17,112 | -14,531 |
| Operational EBIT | 194,984 | 186,184 |
| Fair value adjustments on biological assets | -54,936 | -113,780 |
| Income from associates | -4,709 | -11,216 |
| Earnings before interest and taxes (EBIT) | 135,339 | 61,188 |
| Net interest revenue | -798 | 389 |
| Net interest expenses | -1,425 | -1,844 |
| Net currency effects | -4,974 | -8,527 |
| Other financial expenses | -1,462 | -1,027 |
| Earnings before taxes (EBT) | 126,680 | 50,179 |
| Taxes | -19,929 | -17,305 |
| Profit or loss for the period | 106,751 | 32,874 |
| Value added products – VAP segment | Q1 | Q1 |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| External revenue | 189,095 | 232,252 |
| Internal purchase of raw material | -130,108 | -204,157 |
| Operating expenses | -35,321 | -35,638 |
| Depreciation and amortisation | -1,802 | -1,920 |
| Operational EBIT | 21,864 | -9,463 |
| Provision for onerous contracts | 0 | 70,887 |
| Earnings before interest and taxes (EBIT) | 21,864 | 61,424 |
| Net interest revenue | 1,575 | 1 |
| Net interest expenses | -2 | -875 |
| Net currency effects | -3 | 0 |
| Other financial expenses | -4 | -8 |
| Earnings before taxes (EBT) | 23,430 | 60,542 |
| Taxes | -4,217 | -10,898 |
| Profit or loss for the period | 19,213 | 49,644 |
| Fishmeal, Fish Oil and Fish Feed – FOF segment | Q1 | Q1 |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| External revenue | 82,912 | 85,104 |
| Internal revenue | 122,016 | 92,948 |
| Total revenue | 204,928 | 178,052 |
| Purchase of goods | -100,268 | -119,833 |
| Operating expenses | -42,096 | -36,055 |
| Depreciation and amortisation | -7,338 | -6,123 |
| Operational EBIT | 55,226 | 16,041 |
| Income from associates | 1,842 | 4,119 |
| Earnings before interest and taxes (EBIT) | 57,068 | 20,160 |
| Net interest revenue | 157 | 209 |
| Net interest expenses | -6,312 | -5,818 |
| Net currency effects | 2,406 | 76 |
| Other financial expenses | -70 | -88 |
| Earnings before taxes (EBT) | 53,249 | 14,539 |
| Taxes | -9,585 | -2,617 |
| Profit or loss for the period | 43,664 | 11,922 |
| Reconciliation of reportable segments | ||
|---|---|---|
| to Group earnings before taxes (EBT) | Q1 | Q1 |
| DKK 1,000 | 2015 | 2014 |
| Farming | 126,680 | 50,179 |
| VAP (Value added products) | 23,430 | 60,542 |
| FOF (Fishmeal, Fish Oil and Fish Feed) | 53,249 | 14,539 |
| Eliminations | -37,203 | -7,260 |
| Group earnings before taxes (EBT) | 166,156 | 118,000 |
| Assets and liabilities per segment | Q1 | End |
|---|---|---|
| DKK 1,000 | 2015 | 2014 |
| Farming | 3,757,903 | 3,305,566 |
| VAP (Value added products) | 211,436 | 187,328 |
| FOF (Fishmeal, Fish Oil and Fish Feed) | 851,416 | 754,904 |
| Eliminations | -1,211,063 | -784,865 |
| Total assets | 3,609,692 | 3,462,933 |
| Farming | -986,206 | -753,064 |
| VAP (Value added products) | -13,231 | -7,949 |
| FOF (Fishmeal, Fish Oil and Fish Feed) | -702,298 | -545,308 |
| Eliminations | 309,473 | -92,959 |
| Total liabilities | -1,392,262 | -1,399,280 |
Condensed Consolidated Interim Report for Q1 2015 Issued May 12th 2015
| Distribution of harvested | Q1 | Q1 |
|---|---|---|
| volumes (tgw) | 2015 | 2014 |
| Harvested volume used in VAP production | 4,432 | 5,052 |
| Harvested volume sold fresh/frozen | 5,294 | 4,217 |
| Harvested and purchased volumes (tgw) | 9,726 | 9,269 |
| Q1 | Q1 | |
|---|---|---|
| Harvested volumes (tgw) | 2015 | 2014 |
| Farming North | 7,185 | 321 |
| Farming West | 2,541 | 8,948 |
| Total harvested volumes (tgw) | 9,726 | 9,269 |
| Distribution of | Q1 | Q1 |
|---|---|---|
| harvested volumes (tgw) | 2015 | 2014 |
| Harvested volume used in VAP production | 46% | 55% |
| Harvested volume sold fresh/frozen | 54% | 45% |
| Harvested and purchased volumes (tgw) | 100% | 100% |
| Sales FOF | Q1 | Q1 |
|---|---|---|
| volumes (tonnes) | 2015 | 2014 |
| Feed internal | 12,410 | 10,598 |
| Feed external | 1,990 | 3,358 |
| Feed total (tonnes) | 14,400 | 13,956 |
| Fishmeal external (tonnes) | 5,351 | 3,637 |
| Fish oil external (tonnes) | 1 | 3,314 |
The Group had capital expenditure committed but not provided in these accounts at the date of the Statement of Financial Position of approximately DKK 477 million. DKK 115 million is related to the
Note 27 in Bakkafrost's Annual Report for 2014 provides detailed information on related parties' transactions.
Faroe Farming, an associated company, purchased for DKK 10.5 million from Bakkafrost in Q1 2015. Bakkafrost purchased raw material amounting to DKK 71.8 million from Faroe Farming in Q1 2015. building of the new wellboat, DKK 222 million is related to building of the new harvest and VAP factory, and DKK 113 million is related to the building of the hatchery station.
At the end of Q1 2015, Faroe Farming owed DKK 16.9 million to the Bakkafrost Group.
Transactions between P/F Bakkafrost and its subsidiaries meet the definition of related party transactions. As these transactions are eliminated on consolidation, they are not disclosed as related party transactions.
Condensed Consolidated Interim Report for Q1 2015 Issued May 12th 2015
All assets/liabilities, for which fair value is recognised or disclosed, are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted market prices in an active market (that are unadjusted) for identical assets or liabilities.
Level 2: Valuation techniques (for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable).
Level 3: Valuation techniques (for which the lowest level input that is significant to the fair value measurement is unobservable).
For biological assets, the fair value calculation is done using a valuation model (level 3 in the valuation hierarchy) where the value is estimated based on observable market prices per period end. For more information on these calculations, refer to Note 2.13 and Note 14 in the Annual Report 2014.
For assets/liabilities that are recognised at fair value on a recurring basis, the Group determines, whether transfers have occurred between Levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement).
There have been no transfers into or out of Level 3 fair value measurements.
As at March 31st, the Group held the following classes of assets/liabilities measured at fair value:
| DKK 1,000 | Carrying | ||||
|---|---|---|---|---|---|
| Assets and liabilities measured at fair value | Fair value | amount | Level 1 | Level 2 | Level 3 |
| Financial assets | 221 | 500 | 221 | 0 | 0 |
| Biological assets (biomass) | 974,351 | 744,430 | 0 | 0 | 974,351 |
| Assets measured at fair value 31.03.15 | 974,572 | 744,430 | 221 | 0 | 974,351 |
| Liabilities measured at fair value 31.03.15 | 0 | 0 | 0 | 0 | 0 |
| Financial assets | 233 | 500 | 233 | 0 | 0 |
| Biological assets (biomass) | 1,013,959 | 729,104 | 0 | 0 | 1,013,959 |
| Assets measured at fair value 31.12.14 | 1,014,192 | 729,604 | 233 | 0 | 1,013,959 |
| Liabilities measured at fair value 31.12.14 | 0 | 0 | 0 | 0 | 0 |
P/F Bakkafrost Bakkavegur 9 FO-625 Glyvrar Faroe Islands Telephone: +298 40 50 00 Fax: +298 40 50 09 Email: [email protected] Website: www.bakkafrost.com
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