"The land-based sector is in a learning phase, and so are we at Gigante Salmon," said CEO Kristian Lorentsen, on the company's Q2 results.
Photo: Gigante Salmon / LinkedIn
Gigante Salmon has lowered its expectations for its H2025 and H2026 salmon generations after newly installed fish barriers led to unexpected fish behaviour and problems with oxygen levels and feeding at its flow-through aquaculture facility in nothern Norway, just north of the Arctic Circle.
The company, which is ramping up production at Lille Indre Rosøy in Rødøy municipality, said the measures had not delivered the intended improvement in fish health, while their effect on sludge collection remained unclear.
Fish from the H2025 generation have congregated in parts of the facility's raceway tanks following the installation of the barriers, according to Gigante Salmon. This increased local fish densities and contributed to challenges with oxygen levels, appetite and feeding, as well as mechanical injuries and fish entering restricted areas.
As a result, the fish have reached a lower average weight than planned. Gigante Salmon now expects both lower harvest weights and a smaller proportion of superior-grade salmon from the generation.
The company said it currently expects around 5,800 tonnes HOG from the H2025 generation, with an estimated range of 5,000 to 6,200 tonnes.
Gigante Salmon said the H2026 generation is also expected to be affected. Delays in implementing the barriers postponed fish transfers, meaning the company was not ready to receive smolt at the planned time. It now expects delayed stocking to result in lower harvest volumes and weaker superior grading for this generation as well.
Its harvest volume prediction for H2026 is also 5,800 tonnes HOG, again within a range of 5,000 to 6,200 tonnes.
The new estimates replace all previous forward-looking guidance from the company, which indicated it will now report forecasts by stocked smolt generation rather than calendar year.
Gigante Salmon said it has introduced measures aiming to address the behaviour seen among the H2025 fish and will assess their effectiveness before deciding how to operate with future generations. Depending on the outcome, the company said it may partially or completely reverse the installation of the fish barriers.
The measures were introduced with the aim of improving fish health and sludge collection, the company explained. Gigante Salmon attributed the disappointing results so far partly to delays in implementing the changes and to fish behaving differently than expected after installation.
The company said it will continue discussing measures affecting fish health and what it described as "insufficient" sludge suction performance with the Norwegian Food Safety Authority and the County Governor.
The operational setbacks come as Gigante Salmon continues to scale up production following completion of construction at the facility.
Its H2024 generation produced a record harvest of 1,929 tonnes HOG, compared with 930 tonnes from its H2023 test production generation.
During the second quarter, Gigante Salmon harvested 653 tonnes HOG at an average weight of 3kg. The company reported that 72% of the fish were superior quality, with an economic feed conversion ratio of 1.31.
At the end of June, standing biomass was estimated at around 2,500 tonnes, with an average weight of 1.22kg. This biomass consists entirely of the H2025 generation and is scheduled to be harvested between the fourth quarter of 2026 and the second quarter of 2027.
Gigante Salmon recorded Q2 revenue of NOK 40.7 million (EUR 3.7m/USD 4.3m) and an operating loss of NOK 7.9 million (EUR 0.7m/USD 0.8m).
For the first half of the year, revenue reached NOK 113.2 million (EUR 10.4m/USD 12.1m), while the operating loss was NOK 19.8 million (EUR 1.8m/USD 2.1m) and the net loss for the period was NOK 29.6 million (EUR 2.7m/USD 3.2m).
The company also reported it has invested around NOK 60 million (EUR 5.5m/USD 6.4m) in the facility during the second quarter, primarily on improvements to feeding and oxygenation capacity, housing and technology for collecting and handling sludge.
Kristian Lorentsen took over as Gigante Salmon's CEO on 1 August, as the company moves from construction towards operating all three production basins simultaneously.
"The land-based sector is in a learning phase, and so are we at Gigante Salmon. We are still developing and carrying out improvement projects to optimise the facility. With improvement work, you either succeed directly, or you learn. This quarter has given us more learning than immediate results, and that learning is important for the way forward," Lorentsen said.
The next stocking is expected to mark the first time fish are held in all three basins at the same time. Gigante Salmon continues to target long-term production of 16,000 tonnes HOG.