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“Overall, we are satisfied with the results from the Faroe Islands in this quarter. However not with the results from the Scottish farming segment,” commented CEO Regin Jacobsen about the results for the third quarter of 2022.

In more detail, he indicated: “We are not satisfied with the biological performance in the Scottish farming segment, where mortality rates have been higher than expected in this quarter.”

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“During Q2 2023, we will reach an important milestone in Scotland. As we expect to release the first batch of large smolt from our Applecross hatchery. In the meanwhile, good biological risk mitigation is important and freshwater treatment capacity plays an important role here.

Unfortunately, our new wellboat for Scotland was delayed but was finally in operation in late September. Hereby we have significantly upscaled our freshwater treatment capacity which is now finally at a sufficient level. The new 4,000m3 well-boat can treat gill health issues as well as remove sea lice in one gentle treatment. The results so far are promising,” he advised.

Outlook

Bakkafrost delivered a total operating EBIT of DKK 325 million (DKK 71M) in Q3 2022 and made a profit of DKK 249 million (DKK 131M).

The FO Farming segment achieved higher prices in Q3 2022 than in Q3 2021. For the first nine months of 2022, the combined FO farming and VAP segments made an operational EBIT of DKK 1,395 million (DKK 713M).

On the other hand, Jacobsen confirmed: “We are pleased to see continuing strong biological performance in the Faroe Islands with strong growth, all-time low sea lice levels, and increased average harvest weights. We are also pleased with the positive results from the implemented changes in the large-smolt production regime in the Faroe Islands.”

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Besides, he added: “Regarding the market, Q3 has been a quarter with large variations. The tight supply and high prices at the beginning of the quarter were replaced by significantly higher volumes supplied to the market in the second half of the quarter and at lower prices. However still well above previous years.”

Finally, he warned: “Despite high inflation, the demand for salmon is still strong which is reflected in contract prices for next year. Looking ahead into 2023, the supply growth in the salmon market will be tight with low single-digit growth.”

Investments

On the Capital Markets Day on 14-15 September 2021, Bakkafrost announced a 6.2bn DKK investment plan for 2022-2026. The investments will enable transformation of the operation in Scotland. Also, provide sustainable growth in the Faroe Islands as well as Scotland.

Bakkafrost will build 3 large energy-efficient hatcheries in Scotland. Enabling the implementation of Bakkafrost’s large smolt strategy and giving an annual production capacity above 18 million smolts at 500g.

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