Earnings Release • Feb 22, 2023
Earnings Release
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SalMar - New industrial powerhouse established in the last quarter of 2022 after successful completion of the transactions with NTS, NRS and SalmoNor
* Fourth quarter 2022 marked the end of an eventful year for SalMar with
strategic moves which will further strengthen its position as leading
provider of healthy and sustainable salmon.
* Q4 2022 resulted in a total operational EBIT for the group of NOK 1,006
million. Total harvest was 62,700 tonnes (NOK 16.05 per kg).
* Operational EBIT for Norway was NOK 956 million with a harvest volume of
56,700 tonnes (NOK 16.86 per kg). Biological challenges affected results in
Central Norway, while Northern Norway continued to deliver strong results.
* Sales and Industry recorded solid operational performance, with record high
activity levels at its harvesting and processing plants.
* Continued good results from Icelandic Salmon with record high harvest
volume.
* Weak results from Scottish Sea Farms due to biological challenges.
* Through a series of transactions with NTS, NRS and SalmoNor the results were
consolidated in the group's financials from November 2022. One-off costs
related to the transactions at NOK 120 million affecting results in the
fourth quarter.
* The company is performing a strategic review of ownership in Frøy ASA, with
strong incoming interest.
* The board of directors has resolved to propose a dividend at the same level
as in 2021 of NOK 20.00 per share for the financial year 2022.
* In Norway, the government has proposed resource tax on aquaculture with
effect from the tax year 2023. If approved by parliament, the new tax will
have major impact on the capacity for innovation and investments in the
Norwegian aquaculture industry. SalMar delivered a thorough response in the
public consultation process strongly opposing the proposed tax.
Record high harvest volume in the last quarter of 2022 and strong results for
2022
NTS, NRS and SalmoNor were consolidated into SalMar with effect from November
2022. This is part of the reason why the group's total harvested volumes reached
62,700 tonnes in the fourth quarter. Total operational EBIT for the group was
NOK 1,006 million with an operational EBIT per kg of NOK 16.05.
SalMar's operational performance in Q4 was marked by continued solid performance
in North Norway, strong capacity utilisation and solid operational performance
in Sales and industry and record high harvest volumes in Iceland. Results in
Central Norway, on the other hand, are weak due to biological challenges. And
one-off costs related to the transactions at NOK 120 million affects the results
in the fourth quarter.
"Our committed and highly skilled employees have continued to deliver solid
operational performance, but due to biological challenges it has been a quarter
with mixed results for the group. The biological challenges in Central Norway
were handled well event though it had negative effects in the period", says
SalMar's CEO Frode Arntsen.
For 2022 total harvest volume for the group was 193,700 tonnes with an
operational EBIT of NOK 4,465 million and operational EBIT per kg of NOK 23.05.
"We have never delivered as much salmon to customers all over the world as we
have done in 2022, this has resulted in a good financial result for the full
year which is driven by strong operational performance and strong demand of
salmon with consequently increased salmon prices", continues Arntsen.
2022 an eventful year that shapes our future
"With the completion of the acquisitions of NTS, NRS and SalmoNor and addition
of more than 500 new colleagues and significant investments along our entire
existing value chain, SalMar has grown to become the world's second largest
salmon producer. We have created an even stronger foundation for growth in
SalMar. We will continue our efforts to provide healthy and sustainable salmon
and drive further improvements in our industry at sea and on land", says
Arntsen.
In 2023 the company will continue to invest in already sanctioned projects, but
new investments are on hold in light of uncertainty around Norway's tax
proposal. In 2023 SalMar expects to invest NOK 2.1 billion.
"Both level and structure will divert investments from aquaculture in Norway to
other countries and other industries. In addition the proposal will reduce the
investment capital in Norway's largest renewable export industry. This will
strongly affect innovation power and investments on the Norwegian coast, the
result will reduce the Norwegian industry and ownership and put Norwegian
industrial workplaces and Norways position as the leader in the industry at
risk. No other country has introduced a tax of this kind and at this level on
its food production. It is still unclear to us what framework conditions we have
to deal with two months into 2023, this is unsustainable for one of Norway's
most important export industries", says Arntsen.
"We submitted a clear consultation response at the beginning of January in which
we clearly expressed our opinion and explained the negative effects of the tax
proposal. The tax proposal is based on incorrect assumptions and should be
permanently set aside like a broad majority did in the Norwegian Parliament
three years ago", continues Arntsen.
Expect significant volume growth for SalMar in 2023, but low supply growth
globally
SalMar is firmly committed to continue to lead the industry and create
sustainable growth and value on the terms of the salmon. The company builds its
business and its future on a strong strategic and operational focus with
dedicated employees and a unique corporate culture.
"We see a large and untapped potential for improvement and growth in all parts
of our business, not least in within our existing licenses. In the fourth
quarter we have also implemented the operational structure for "new" SalMar in
Norway, and we will during 2023 optimize our operations to take advantage of the
potential we see in the acquisitions we have made," says Arntsen.
Growth in supply for Atlantic salmon is expected to be low in 2023 globally. But
due to the acquisitions SalMar expect a significant volume growth. For 2023,
SalMar keeps its volume guidance for Norway at 243,000 tonnes and for Iceland at
16,000 tonnes. For Scotland, guidance is reduced to 37,000 tonnes.
For the first quarter of 2023, the company expects significantly lower volumes
than in the previous quarter and a similar cost level. Contract share for the
first quarter and full year 2023 will be around 25% and 10% respectively.
The complete report and presentation for the fourth quarter 2022 is attached.
SalMar's CEO Frode Arntsen and CFO Ulrik Steinvik will present the company's
results in Hotel Continental, Stortingsgata 24-26, Oslo, Norway today at 8am
CET. The presentation will also be available on webcast on www.salmar.no
(http://www.salmar.no).
For further information, please contact:
Frode Arntsen, CEO
Tel: +47 482 06 665
Email: [email protected]
Ulrik Steinvik, CFO
Tel: +47 900 84 538
Email: [email protected]
Håkon Husby, Head of Investor Relations
Tlf: +47 936 30 449
Email: [email protected]
About SalMar
SalMar is one of the world's largest and most efficient producers of salmon. The
Group has farming operations in Central Norway, Northern Norway and Iceland, as
well as substantial harvesting and secondary processing operations. In addition,
the company is operating within offshore aquaculture through the company SalMar
Aker Ocean and SalMar owns 50% of the shares in Scottish Sea Farms Ltd.
See 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.
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