SalMar - Results for the fourth quarter 2019

SalMar ASA made an Operational EBIT of NOK 658.1 million in the fourth quarter 2019, compared with NOK 934.9 million in the same period in 2018.

“The fourth quarter was weaker than expected for the SalMar Group,” says the Group’s CEO Gustav Witzøe. “This is largely attributable to the Fish Farming Central Norway segment harvesting a large volume of salmon at the start of the quarter when the spot price was at its lowest point. At the same time, it is satisfying to see that our Fish Farming Northern Norway segment posted substantially better results after several weak quarters.”

SalMar generated just under NOK 3.2 billion in gross operating revenues in the fourth quarter 2019, up NOK 86 million on the corresponding period in 2018. A total of 40,300 tonnes of salmon was harvested in the quarter, 200 tonnes less than in the same period the year before. SalMar’s Operational EBIT per kg came to NOK 16.31 in the fourth quarter, down NOK 6.8 per kg on the fourth quarter 2018. The decrease is largely attributable to weak price achievement due to harvesting when prices were at their lowest in the quarter.

Fish Farming Central Norway harvested fish transferred to sea farms in the autumn of 2018 earlier than planned at the start of the fourth quarter 2019 to reduce the biological risk posed by salmon lice. This had a negative impact on average fish weight and costs and resulted in weak price achievement in a quarter when salmon prices rose by 46 per cent from October to December. A lower harvest volume and slightly higher costs are expected in this segment in the first quarter 2020.

As expected, Fish Farming Northern Norway achieved a significantly lower level of costs and a higher harvested volume than the quarter before. This was due to larger volume and harvesting of fish from sites with a better biological performance. SalMar expects stable costs and a similar volume in the first quarter 2020.

Arnarlax ended 2019 with yet another positive quarter, driven by good biological performance and better capacity utilisation at its harvesting plant. For the year as a whole, the company achieved a 46 per cent increase in the volume harvested and posted an EBIT per kg of NOK 10.21 compared with an EBIT per kg of NOK -11.82 in 2018. At the same time, there is still room for improvement throughout the value chain, particularly with respect to distribution costs. Arnarlax expects a higher harvested volume and higher costs in the first quarter 2020 due to the harvesting out of the 2018-generation following increased mortality in a demanding period caused by winter storms at the start of the year.