SalMar Reports Strong Q3 Performance Amid Challenges

SalMar's Financial Highlights in the Third Quarter

Operational EBIT for Norway reached NOK 1,082 million, showcasing a solid performance amidst a challenging environment. The total harvest volume for this period stood at 56,400 tonnes, yielding an operational EBIT per kilogram of NOK 19.2. On a group level, operational EBIT was NOK 1,041 million with an overall harvest volume of 60,300 tonnes, translating to an operational EBIT of NOK 17.3 per kilogram.

Adapting to Biological Challenges

The farming segments in Norway faced biological challenges during this quarter. This situation has prompted a downward revision of volume expectations for 2024. However, despite these obstacles, the sales and industry sectors boasted historically strong results. The company’s efficient operational setup combined with an effective contract strategy positively influenced these results.

Future Harvesting Plans

SalMar Aker Ocean has successfully completed the harvest of its remaining volume for the year. The production cycles for both Ocean Farm 1 and Arctic Offshore Farming are progressing well with plans for harvesting in the coming years.

Performance of Associated Companies

Icelandic Salmon continued to grapple with low volume and high operating costs, while Scottish Sea Farms reported an impressive quarter with heightened harvest volumes, greater harvest weights, and overall robust biological health across all regions.

Strategic Acquisition for Growth

In a move to bolster its market presence, SalMar agreed to acquire a controlling interest in AS Knutshaugfisk through a mix of cash and shares. This company operates with 3,464 tonnes MAB in licenses and four farming sites located in Central Norway. According to CEO Frode Arntsen, this acquisition represents a natural progression of a successful partnership with Knutshaugfisk.

Identified Cost Savings and Future Outlook

Following successful integrations in acquisitions made over the last year, SalMar has completed a comprehensive analysis of its value chain, uncovering NOK 1.2 billion in potential savings. Through enhanced operational efficiencies, the company anticipates realizing these savings by 2029.

Commitment to Efficiency

Arntsen emphasized the company's ongoing commitment to improving operations and streamlining its processes to boost sustainability and efficiency. The demand for SalMar’s products remains strong, and the focus shifts towards optimizing production.

Updated Volume Guidance for 2024

Due to the aforementioned biological challenges, the volume guidance for 2024 has been revised to an expected total of 217,000 tonnes in Norway. SalMar Aker Ocean concluded its harvesting operations for 2024 with a total of 6,900 tonnes. Iceland's volume guidance remains steady at 13,000 tonnes while Scottish Sea Farms anticipates an increase of 3,000 tonnes, projecting a total of 40,000 tonnes.

Growth Projections for 2025

Looking ahead to 2025, forecasts predict a total of 254,000 tonnes from Norway, alongside 9,000 from SalMar Aker Ocean, 15,000 tonnes from Iceland, and 32,000 tonnes from Scottish Sea Farms. Altogether, these figures suggest an overall group total of 294,000 tonnes, representing a 14% increase compared to the previous year.

Conclusion

SalMar's management believes the company is in an advantageous position to seize potential opportunities within the value chain. Despite facing production challenges in 2024, proactive measures are being implemented throughout its operations, instilling confidence in reaching established volume targets.

For those interested in further insights, SalMar's CEO and CFO will unveil the company's detailed results at a scheduled presentation. This will also be accessible via the company's website.

Frequently Asked Questions

What are the main financial results for SalMar in Q3?

SalMar recorded an operational EBIT of NOK 1,041 million, with a total harvest volume of 60,300 tonnes in Q3.

What biological challenges did SalMar face?

The farming segments in Norway encountered biological challenges that affected harvest volumes and led to a revision of future volume expectations.

What acquisition did SalMar make recently?

SalMar entered into an agreement to acquire a controlling interest in AS Knutshaugfisk, enhancing its operational presence in Norway.

What are the projected harvest volumes for 2025?

For 2025, SalMar anticipates a total of 294,000 tonnes, a notable increase from 2024.

How does SalMar plan to improve efficiency?

SalMar has identified significant cost-saving opportunities and is committed to improving its operational structure to enhance efficiency across the value chain.

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