Bakkafrost releases its results for the fourth quarter of 2024.
The Bakkafrost Group has announced its financial results for Q4 2024, reporting an operational EBIT of DKK 280 million (37.5m EUR / 39.4m USD), compared with DKK 356 million (47.7m EUR / 50.1m USD) in the fourth quarter of last year, marking a drop of just over 21%.
Despite challenges such as lower salmon prices and reduced external fishmeal and oil sales, the company highlighted what Bakkafrost CEO Regin Jacobsen described as "robust" biological performance in its Faroese operations and "continued progress" in its freshwater segment.
"The Freshwater and Farming operations in Faroe Islands had a strong development in this quarter. Biological performance remains robust, with solid growth, effective sea lice management, and harvesting of large fish," Jacobsen said in a press release announcing the results.
"We are also pleased with the continued progress in our freshwater segment, which has set new production records for the second consecutive quarter of producing large, high-quality smolt. This improved efficiency is helping to reduce costs," Jacobsen added.
In the fourth quarter, Bakkafrost Group's Faroese operations generated revenues of DKK 1,184 million (158.7m EUR / 166.6m USD), down from DKK 1,478 million in Q4 2023, and achieved an operational EBIT of DKK 310 million (41.6m EUR / 43.6m USD), a drop of almost 33% compared with the same period last year.
Meanwhile in Scotland, revenues saw a significant jump to DKK 286 million (38.4m EUR / 40.2m USD), up from DKK 84 million in Q4 2023, driven by higher harvest volumes and reduced mortality. Although this still made an operating loss of DKK -31 million (-4.2m EUR / -4.4m USD), this marked a significant improvement from last year's fourth-quarter loss of DKK -104 million.
"Stronger supply growth contributes to downward price pressure. The market price for salmon was weaker than expected this quarter, negatively impacting the margin," Jacobsen said.
Meanwhile, Bakkafrost's fishmeal, oil, and feed (FOF) segment saw record-high feed sales in 2024, which Jacobsen said marked "the second-best year after 2023".
However, "Despite good full-year financial results, fourth-quarter performance was hurt by lower external fishmeal and oil sales due to reduced raw material sourcing, which normalized following the record-high levels in 2023," Jacobsen said. The segment sourced 41,919 tonnes of raw materials in Q4 (down from 53,552 tonnes in Q4 2023), with an operational EBIT margin of 12%, compared to 25% last year.
Bakkafrost transferred a total of 7.1 million smolts in Q4, with the Faroese freshwater segment contributing 6.1 million and the Scottish segment transferring one million. For the full year, smolt transfers totalled 23.1 million, on par with 2023 figures, the Group said.
Meanwhile, combined harvest volumes rose to 20,478 tonnes gutted weight (17,067 TGW in Q4 2023). The Faroese farming segment harvested 16,638 TGW, while Scotland’s farming operations recorded 3,840 TGW. For the full year 2024, Bakkafrost saw a growth in volume, reaching 90,656 TGW, compared to 73,006 TGW in 2023.
Bakkafrost transferred a total of 7.1 million smolts in Q4, with the Faroese freshwater segment contributing 6.1 million and the Scottish segment transferring 1.0 million. For the full year, smolt transfers totaled 23.1 million, on par with 2023 figures.
Looking ahead to 2025, Bakkafrost indicated it expects to harvest around 97,000 tonnes this year, comprising 77,000 tonnes from the Faroe Islands and 20,000 tonnes from Scotland. A significant portion (62%) of the Scottish harvest is planned for the first half of the year as part of ongoing risk management strategies, the company said.
The Bakkafrost Group currently has three major development projects underway, which CEO Regin Jacobsen described as "crucial to achieving our goals for 2028 and beyond with robust large smolt, best feed and good fish welfare.”
Bakkafrost is currently scaling up production at its Applecross Hatchery in Scotland, as well as expanding its Skálavík Hatchery in the Faroes to increase smolt production capacity to 24 million annually. Its Havsbrún feed factory is also undergoing expansion.
The company indicated it remains committed to its 2024-2028 investment plan, which aims to grow annual harvest volumes to 165,000 tonnes by 2028.