Nordic Halibut continues to be well positioned to achieve its ambitious long-term production targets of 4,500 tonnes head-on-gutted (HOG) by 2026 and 9,000 tonnes HOG by 2030, according to its latest quarterly report.
In its Q2 update, Nordic Halibut notes that the price of farmed halibut can vary throughout the year due to seasonal changes. Typically, demand and prices are lower in the second and third quarters. However, a positive trend in prices has continued into the second quarter of 2023. The average sales price for this quarter reached 155 NOK/kg, showing a 7% increase compared to the same period in 2022.
However, when taking the first two quarters together, the average sales price for the first half of 2023 showed a substantial year-on-year growth of 18%, closing at 164 NOK/kg. Anticipating a stable price trajectory in the third quarter, Nordic Halibut foresees a rise in prices upon entering the high-demand season in the fourth quarter.
Presenting the results, CFO Kenneth Meyer noted that overall harvest volumes for 2023 will be somewhat lower than initially projected due to strategic decisions aimed at optimizing revenue from existing biomass and aligning with market preferences.
However, "Our second quarter results are in line with our expectations," he said.
Throughout the quarter, 151 tonnes (equivalent to 135 tonnes HOG) were harvested, with an average weight of 5.2 kg per fish. The quarter's total revenue amounted to NOK 21 million, marking a substantial 31% year-on-year growth.
The quarter saw a positive EBITDA of NOK 2.7 million, while the period ended with a total loss of NOK 7.7 million, largely due to what Meyer described as "escalated feed expenses", as well as a marginal increase in operational costs.
At the conclusion of the period, the available liquidity stood at NOK 135 million, providing a solid financial foundation to carry out Nordic Halibut's growth plan, Meyer said.
"We have full confidence in our ability to unlock the potential of producing sustainable halibut on an industrial scale. In 2023, Nordic Halibut anticipates the release of 1 million fish into the sea, equivalent to the growth phase 1 production target of 4500 tonnes HOG to be harvested within 2026," Meyer concluded.
The report highlights a noticeable uptick in interest and acceptance of farmed halibut in key export markets, which the company predicts will translate into higher prices for their farmed halibut than for wild-caught fish. In Q2 2023, the export price differential for halibut from Norway favoured farmed halibut by approximately 57%.
This premium price level underscores the considerable potential for achieving higher prices for farmed halibut, according to the company. Strategic decisions regarding the allocation of sea-based resources and harvest timing are ongoing, with the aim of establishing a robust market presence and optimizing pricing and revenue. Notably, larger-sized halibut, especially those weighing above 7 kg, are fetching significantly higher sales prices.
"We find ourselves in this remarkable situation where our harvest is consistently sold out," said Marketing Manager Cathrine Henden.
The company's lack of major competitors and strong sustainability profile are significant advantages, Henden said, adding that this "opens up an opportunity for us to diversify", with Nordic Halibut "activlely exploring new product offerings and innovations".
Targeting restaurants and premium consumer outlets, including the lucrative sushi and sashimi sector, Henden said that Nordic Halibut's "primary business goal is to exploit the potential of the high-end market".
Nordic Halibut AS is one of the world's leading producers of farmed Atlantic halibut, specifically sushi-grade. This Norwegian company has licenses to produce 4,500 tons per year of Atlantic halibut and continues to increase the numbers. This is thanks to its methodology that allows the product to be available fresh on ice all year round and is not dependent on seasonal changes.
