SalMar CEO Frode Arntsen, during the presentation of the group's fourth-quarter results for 2023.
Image: SalMar
Presenting its 2023 Q4 results this morning from Oslo, Norwegian salmon farming giant SalMar has reported a solid conclusion to 2023, marking it as a record year for the company.
The fourth quarter closed a year of strategic milestones, a bolstered financial position, and exemplary operational performance, as announced by CEO Frode Arntsen.
During Q4, the company's profits shot up in comparison with last year, with SalMar more than doubling its operational earnings to reach almost NOK 2.2 billion (EUR 189.8 million / USD 203.7 million), on account of both higher harvest volumes and higher prices.
However, the final quarter of 2023 was not without its challenges.
"When the going gets tough, the tough get going," was the motto quoted on the company's slides, as Arnsten remarked on the environmental problems faced by SalMar's farming operations towards the end of 2023. An influx of deadly string jellyfish led to the culling of 1.2 million fish in November, followed by harsh weather conditions and winter storms affecting operations in December.
Before presenting the Q4 results in detail, Arnsten also commented briefly on the European Commission's allegations that SalMar, together with five other Norwegian salmon companies, had breached EU competition law in 2019. Arnsten said that SalMar "strongly disagrees" with the EC's preliminary findings, and said the company would be exercising its right to defence.
The fourth quarter of 2023 saw SalMar posting an operational EBIT (Earnings Before Interest and Taxes) of NOK 2,158 million (EUR 189.8 million / USD 203.7 million).
The harvest volume for the quarter reached 83,100 tonnes, an increase of 32.5% compared to last year, which translated to an operational EBIT per kilogram of NOK 26 (EUR 2.29 / USD 2.46).
In SalMar's Norwegian operations alone, the harvest volume stood at 73,600 tonnes with an operational EBIT per kilogram of NOK 28.8 (EUR 2.54 / USD 2.72).
SalMar CEO Frode Arntsen described 2023 as "another landmark year" for the company, driven by the successful integration of its acquisitions, NTS, Norwegian Royal Salmon, and SalmoNor.
The consolidated harvest volume for 2023 as a whole saw a whopping increase of 31% from the previous year, reaching 254,100 tonnes. The operational EBIT for the year was reported at NOK 8,088 million (EUR / USD), with an operational EBIT per kilogram of NOK 31.8.
Reflecting the strong financial outcomes, SalMar's board of directors has proposed a dividend of NOK 35 per share for 2023 - a total of NOK 4.6 billion.
“Our team has again performed well and delivered impressive results, both in terms of operational performance, synergy realization and strategic achievements," Arntsen said.
"I am proud of our dedicated and skilled employees and the strength that the SalMar organization has shown throughout 2023,” he added.
The farming segments in Norway reported strong results, attributed to efficient operational performance. However, challenges such as an influx of toxic jellyfish at SalMar's Norwegian farming sites in Q4 led to increased cost levels per kilogram.
The Sales and Industry segment continued to demonstrate solid operational capabilities, while Icelandic Salmon faced biological issues early in the fourth quarter, impacting its results negatively.
SalMar's joint venture with Leroy in Scotland, Scottish Sea Farms, fared less well during the quarter, suffering a drop in operating income of just over 28%, down to NOK 497 million (EUR 43.8 million / USD 47 million), together with a 37% lower harvest volume of 4,600 metric tons.
Meanwhile, the SalMar group moved ahead with its offshore aquaculture ambitions. SalMar Aker Ocean introduced two semi-offshore projects, including Arctic Offshore Farming, which began its first harvest during the quarter.
Looking ahead to 2024, SalMar has adjusted its harvest guidance in Norway to 237,000 tonnes due to the jellyfish blooms experienced at the close of 2023, while maintaining its volume guidance in other regions. The company anticipates strong demand for its products amidst limited global supply growth.
Arntsen said he remained optimistic about the company's future prospects and ability to deliver on the volumes announced last year.
“Looking ahead, we see a large potential for improvement and growth in all parts of our business. Despite unresolved regulatory frameworks we firmly believe that our current operational structure has potential for further growth going forward," Arnsten said.
"We remain committed to our volume ambition presented at the capital markets day in September last year (362,000 tonnes) despite challenges at the end of 2023 due to jellyfish. We shall continue to deliver healthy and sustainable salmon to the world."