Icelandic Salmon Q2 2024: Biological Performance Improving
Company Overview
Icelandic Salmon serves as the parent company for Arnarlax and several other subsidiaries that specialize in salmon farming and processing. Together, these companies, known as the 'Group', are dedicated to sustainable salmon production.
Operations Update
In the second quarter of 2024, Icelandic Salmon reported a harvest of 700 tonnes, a substantial increase from the 88 tonnes harvested during the same period last year. This growth in harvest volume demonstrates the Group's commitment to enhancing biological asset growth, while also adapting to seasonal variations influenced by environmental temperatures.
Although the company faced biological challenges earlier in the year that affected its operations, the corrective actions taken are starting to produce positive results. Nonetheless, some biological irregularities remain, resulting in a one-off charge of EUR 3.9 million.
CEO Bjørn Hembre remarked, "Our dedicated team has put in tremendous effort to address and overcome the challenges we've encountered since winter, and we are now beginning to see the fruits of those efforts. While harvest volumes were lower than desired, the quality of our salmon was exceptional, enabling us to capture a market share of 90 percent this quarter."
The Group's revenues for Q2 2024 reached EUR 9.7 million, a significant rise from EUR 2.7 million in the same quarter last year. However, the EBIT for this quarter stood at negative EUR 3.8 million, largely due to the aforementioned one-off costs. The operational EBIT per kilogram was negative EUR 5.37, but when adjusted for one-offs, it turned positive at EUR 0.19.
Strategic Milestones
In this quarter, Icelandic Salmon marked a strategic achievement by obtaining a license for 10,000 tonnes of sterile salmon across three new sites, setting the stage for sustainable growth.
With this new license, Icelandic Salmon's total licensed capacity now amounts to 33,700 tonnes MAB. Additionally, a license for 1,000 tonnes MAB was granted for its smolt facility in Gileyri, and approval for an extra 4,500 tonnes MAB in sea and two new sites in Arnarfjörður is anticipated.
Market Update
The Group continues to see strong market interest in its salmon products. Notable price achievements were recorded for its limited share of downgraded fish, which are allowed for export and used as raw material for high-quality products.
This quarter, the contract share was reported at 59%, which negatively impacted the results, primarily due to elevated spot prices.
Outlook for 2024
Icelandic Salmon has adjusted its full-year guidance down to 13,000 tonnes due to persistent biological challenges and delayed harvests. The issues faced in the first half of the year are expected to affect harvest volumes into 2025, although specific projections for next year have not been provided.
CEO Bjørn Hembre added, "Looking ahead, we see growth potential of up to 36,000 tonnes across our existing licenses. With the quality of this year's smolt and recent improvements in biological performance, we are optimistic about achieving 26,000 tonnes in the coming years. Reaching 36,000 tonnes will depend on our ability to effectively optimize our sterile licenses. I am confident in our capability to drive this growth and fulfill our potential to deliver sustainable Icelandic salmon to the global market."
Presentation Details
The second quarter 2024 presentation will be conducted by CEO Bjørn Hembre and CFO Jónas Heiðar Birgisson. Information on how to join the webcast and participate in the Q&A session will be shared during the presentation.
Contact Information
For more information, please reach out to:
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 and is the owner of Arnarlax ehf, which is Iceland's leading farming company, fully overseeing the entire value chain from egg to market delivery.
Frequently Asked Questions
What was the main highlight of Icelandic Salmon's Q2 2024 report?
The standout feature was the remarkable increase in harvest volume to 700 tonnes, compared to just 88 tonnes in the same quarter last year, along with improvements in biological performance.
How did Icelandic Salmon's revenue change in Q2 2024?
In Q2 2024, revenues surged to EUR 9.7 million, a significant rise from EUR 2.7 million during the same quarter the previous year.
What challenges is Icelandic Salmon currently facing?
The Group is currently dealing with ongoing biological challenges that have impacted operations and harvest volumes, necessitating a reassessment of stock value.
What is the future outlook for Icelandic Salmon's production?
The production outlook has been revised down to 13,000 tonnes for 2024, but there remains potential for growth up to 36,000 tonnes in the long term, contingent on effective optimization of licenses.
Who is the CEO of Icelandic Salmon?
Bjørn Hembre is the CEO of Icelandic Salmon, leading the company through its current challenges and opportunities.
