Icelandic Salmon Q2 2024 Update on Growth and Challenges
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Icelandic Salmon Q2 2024: Biological Performance Improving
Company Overview
Icelandic Salmon is the parent company of Arnarlax and other subsidiaries involved in salmon farming and processing. Collectively referred to as the 'Group', these companies focus on sustainable salmon production.
Operations Update
In the second quarter of 2024, Icelandic Salmon harvested 700 tonnes compared to 88 tonnes in the same quarter last year. This harvest volume reflects the Group's emphasis on prioritizing biological asset growth, alongside seasonal growth variations influenced by environmental temperatures.
Despite biological challenges earlier in the year impacting operations, corrective measures implemented are beginning to yield positive outcomes. However, some biological irregularities persisted, leading to a one-off charge of EUR 3.9 million.
CEO Bjørn Hembre stated, "Our highly committed team has worked hard to manage and mitigate the challenges we have faced since the winter, and these efforts are now beginning to show results. Although harvest volumes were low, the quality of our salmon was high, allowing us to supply the market with a superior share of 90 percent this quarter."
The Group reported revenues of EUR 9.7 million in Q2 2024, a significant increase from EUR 2.7 million in the same quarter last year. The EBIT for the quarter was negative EUR 3.8 million, influenced by the earlier mentioned one-off costs. Operational EBIT/kg was negative EUR 5.37, but adjusted for one-offs, EBIT/kg was positive at EUR 0.19.
Strategic Milestones
During this quarter, Icelandic Salmon achieved a strategic milestone by securing a license for 10,000 tonnes of sterile salmon at three new sites, positioning the Group for sustainable growth.
With this new license, Icelandic Salmon now holds licenses totaling 33,700 tonnes MAB. Additionally, a license of 1,000-tonnes MAB was granted for its smolt facility in Gileyri, with approval for an additional 4,500 tonnes MAB in sea and two new sites in Arnarfjörður anticipated.
Market Update
The Group continues to experience strong market interest in its salmon products. Positive price achievements were noted on its limited share of downgraded fish, which are permitted for export and serve as raw material for high-quality products.
The contract share for this quarter was reported at 59%, which adversely affected the results primarily due to high spot prices.
Outlook for 2024
Icelandic Salmon has reduced its full-year guidance to 13,000 tonnes due to ongoing biological challenges and deferred harvests. The issues reported in the first half of the year are expected to affect harvest volumes into 2025, though no specific projections for next year are provided.
CEO Bjørn Hembre added, "For the longer term, we see growth potential of up to 36,000 tonnes across our existing licenses. With this year's smolt quality and recent biological performance improvements, we are optimistic about reaching 26,000 tonnes in the coming years. Achieving 36,000 tonnes will depend on optimizing our sterile licenses effectively. I am confident in our capacity to drive this growth and fulfill our potential to provide sustainable Icelandic salmon to the world."
Presentation Details
The presentation for the second quarter of 2024 will be led by CEO Bjørn Hembre and CFO Jónas Heiðar Birgisson. Details for joining the webcast and Q&A session will be provided during the presentation.
Contact Information
For further information, please contact:
CEO Bjørn Hembre
Tel: +354 620 1936
Email: bjorn@arnarlax.is
CFO Jónas Heiðar Birgisson
Tel: +354 855 7760
Email: jonas@arnarlax.is
About Icelandic Salmon
Icelandic Salmon is listed on Euronext Growth. The Group is the owner of Arnarlax ehf, Iceland's leading farming company, fully managing the value chain from egg to market delivery.
Frequently Asked Questions
What was the main highlight of Icelandic Salmon's Q2 2024 report?
The main highlight was the significant increase in harvest volume to 700 tonnes compared to last year's 88 tonnes, alongside improvements in biological performance.
How did Icelandic Salmon's revenue change in Q2 2024?
Revenues increased to EUR 9.7 million in Q2 2024, up from EUR 2.7 million during the same quarter the previous year.
What challenges is Icelandic Salmon currently facing?
The Group has faced ongoing biological challenges that have impacted operations and harvest volumes, leading to a reassessment of stock value.
What is the future outlook for Icelandic Salmon's production?
The outlook includes a reduced guidance for 2024 to 13,000 tonnes, but there is potential growth up to 36,000 tonnes in the longer term with effective optimization of licenses.
Who is the CEO of Icelandic Salmon?
The CEO of Icelandic Salmon is Bjørn Hembre, who has been leading the company's efforts amidst the current challenges and opportunities.
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