SalMar ASA

Earnings Release • Nov 14, 2019

SalMar - Results for the third quarter of 2019

SalMar - Results for the third quarter of 2019

SalMar ASA made an Operational EBIT of NOK 613.5 million for the third quarter

of 2019, compared with NOK 939.1 million for the same period last year.

"For the SalMar Group, the third quarter was a mixed experience Central Norway

posted satisfactory results, in line with our expectations. Sales and Processing

achieved good results on the back of efficient operations and a good allocation

of volumes in a challenging period with declining prices. However, Northern

Norway's performance was very weak," says SalMar's CEO Gustav Witzøe.

"In SalMar we are always looking for possibilities to improve our operational

performance. Through the creation of SalMar Ocean the we aim to coordinate and

strengthen our efforts within offshore fish farming. We see a significant

potential within offshore fish farming and by doing this we want to maintain our

leading position in this area both with relation to technological developments

and biological production. This will contribute to an environmentally

sustainable development of Norwegian aquaculture industry in the years to come,"

SalMar's CEO Gustav Witzøe.

SalMar generated gross operating revenues of just under NOK 2.8 billion for the

quarter, on a par with the corresponding period last year. The Group harvested

some 35,800 tonnes, 300 tonnes less than in the same period in 2018. SalMar's

Operational EBIT per kg came to NOK 17.12 for the third quarter of 2019, a

decrease of NOK 8.91 per kg compared with the same period last year. The lower

profit margin is largely attributable to lower salmon prices and poor results in

Northern Norway.

Fish Farming Central Norway posted satisfactory results. The fish harvested were

largely salmon that had been transferred to sea farms in the spring of 2018, a

generation that has performed well biologically. Towards the end of the period,

in order to reduce the risk posed by salmon lice in Central Norway, SalMar chose

to start harvesting fish transferred to sea farms in the autumn of 2018 earlier

than planned. This had a negative effect on costs, average weight and price

achievement for the quarter. For the same reason, the segment's costs are

expected to be slightly higher and volume somewhat lower in the fourth quarter.

In recent quarters, Fish Farming Northern Norway's cost level has been

disappointing, and its performance in the third quarter was very weak. This is

mainly due to biological challenges. Illness and the risk of illness has

resulted in fish being harvested earlier than planned, which has negatively

affected both price achievement and costs. The sites that had biological

challenges was emptied out by the end of the third quarter and SalMar therefore

expects a substantially lower cost level and a higher volume the fourth quarter

where one will harvest from sites that have performed better biologically and

have lower costs than those harvested in the third quarter.

Arnarlax posted yet another positive result. High average weight for the fish

harvested led to good price achievement, while production costs remained at the

same level as earlier in the year. Compared with last year, Arnarlax's result in

the period was a sharp improvement due to better biological performance and

operational improvements. Arnarlax expects costs and volume to remain at the

same level in the fourth quarter.

SalMar's Sales and Processing segment made an operating profit of NOK 102.3

million for the third quarter of 2019. Good allocation of sales and efficient

operations produced good results in a period of falling prices. At the same

time, lower prices resulted in higher margins on fixed-price contracts. As at

13 November 2019, SalMar has secured fixed contracts covering 20 per cent of its

planned sales volume in the fourth quarter.

The global supply of Atlantic salmon is expected to increase by around 7 per

cent in 2019 and by 4 per cent in 2020. Combined with expectations of good

demand, this indicates a balanced salmon market, with the outlook for continued

good prices.

SalMar maintains its expectations to harvest a total of 145,000 tonnes of salmon

in Norway and 10,000 tonnes in Iceland in 2019. In 2020, the company expects to

harvest 152,000 tonnes in Norway and 10,000 tonnes in Iceland.

The complete report and presentation for the third quarter 2019 is attached.

SalMar's CEO Gustav Witzøe and CFO & COO Trine S. Romuld will present the

company's results today at 8am at Hotel Continental in Oslo.

For further information, please contact:

CEO Gustav Witzøe,

Tel: +47 911 47 834

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

CFO Trine Sæther Romuld,

Tel: + 47 991 63 632

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

See also 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.