Salmon Evolution started 2024 with continued good operational performance, strong harvest results, and a high price realization for its superior grade salmon.
Photo: Salmon Evolution.
When Salmon Evolution presented its Q4 2023 results in mid-February, CEO Trond Håkon Schaug-Pettersen already gave some clues about the company's promising outlook for what was to come. "We are on track for a very promising quarter," he said. With good data on standing biomass and an all-in price realization of NOK ~108/kg (EUR ~9.31/kg - USD ~10.09/kg) recorded in Q1 2024 for its superior grade fish, in the operational update presented today he went further and claimed the land-based company is ready or capitalize on record high salmon prices.
In Q1 2024, the total volume harvested by Salmon Evolution at its Indre Harøy hybrid flow-through system facility was 901 tons of gutted fish. The average fish weight was 4.6 kg (LW), and a superior grade share of 96%. These "exceptional harvest results," as the company defines them in its presentation, are expected to be even better for Q2.
The company expects second-quarter harvest volumes to be between 1,600 and 1,800 tons HOG, this is a doubling of the harvest.
"In the first quarter we had an industry leading superior grade share of 96%, continuing to demonstrate excellent fish welfare," CEO of Salmon Evolution, Trond Håkon Schaug-Pettersen stated.
"With Q2 harvest volumes expected to double from Q1, Salmon Evolution is uniquely positioned to capitalize on the current record high salmon prices," he added.
To capitalize on record-high prices, Salmon Evolution is relying on stable operations in its fully stocked farm. Standing biomass was nearly 2,700 tonnes LW at the end of Q1, up 21% from the previous Q4 2023 figure. Net biomass growth was ~1,560 tons LW, up 8% from the previous quarter.
Another data point indicating the steady increase in land-based salmon farmer biomass growth is that their feeding levels increased by 25 % in March compared to January. The average daily feeding last month was 21 t/day. In addition, batch 11 was stocked in mid-March, and two additional smolt groups are planned to be stocked in Q2.
As said above, the weight distribution of the Q1 harvest was mainly adjusted in a weight category between 4 and 5 kg, and slightly more than 96% of the harvest was higher-grade salmon. The all-in price realization of NOK ~108/kg (EUR ~9.31/kg - USD ~10.09/kg) also mentioned, includes downgraded fish, but the amount of downgraded fish was minimal, and Salmon Evolution consistently outperformed the NASDAQ benchmark price in higher grade fish.
"When we say we put biology first, this is not just something we say - you can actually also now see it in our performance," Trond Håkon Schaug-Pettersen commented at the Q4 2023 results presentation. As the results advanced in this Q1 2024 operational update demonstrate, achieving a high percentage of superior quality fish also means that it can fetch higher prices.
At a time when market prices are high, and many competitors have just gone through major seasonal biological problems resulting in a higher percentage of so-called 'production fish' or 'prod-fish' in their productions, its focus on biology pays off for Salmon Evolution.
Pioneering the hybrid flow-through system (HFS), Salmon Evolution is a global leader in land-based salmon farming with a clear roadmap for 100,000 tonnes HOG annual production capacity. This approach, capturing the benefits of both land-based and sea-based farming, puts biology first and limits operational and biological risk.
The company's first facility - and industrial-scale global center of excellence - is strategically located in Indre Harøy, in the heart of the aquaculture industry on the west coast of Norway. Nevertheless, Salmon Evolution aims for major international expansion, starting with North America, where it is already in advanced negotiations on a site, and South Korea, where it faces some challenges mainly due to the lack of a clear regulatory framework.