Biological problems harm Bakkafrost results in the fourth quarter of 2021

Bakkafrost may be among the hardest hit if Faro's new "salmon tax" is approved. Photo: Bakkafrost.
Bakkafrost may be among the hardest hit if Faro's new "salmon tax" is approved. Photo: Bakkafrost.

Increased catches and higher salmon prices have helped the results to remain positive. However, the continued biological problems suffered by Bakkafrost, both in the Faroe Islands and Scotland, have led the company's own CEO, Regin Jacobsen, to admit that they are not as expected in the presentation of results for the last quarter of 2021.

"The results in this quarter have been negatively affected by the continuation of the biological issues we reported in previous quarter and gave an update on in our profit warning in December", he explains. Moreover, Jacobsen has advanced that the problems begin to be solved at this 2022 startup. "We are now pleased that mortality levels have normalized", Jacobsen says.

Photo: Bakkafrost.

Record volumes at Faroe Islands

Despite these problems, total volumes harvested for the fourth quarter of 2021 were 25,800 tons. Of this, a total of 20,700 tons were from the Faroe Islands, quadrupling the figure achieved in Scotland, which reached 5,100 tons.

"In the Faroe Islands, we are pleased to have reached record high harvesting volumes in the fourth quarter and for the full year, despite some challenges we are excited to see record low feed conversion rates and record high weight on transferred smolt", Bakkafrost CEO states.

Strong salmon market

Those volumes were also boosted by high market prices for salmon in the last quarter, a topic everyone is talking about these days, including Regin Jacobsen. "The salmon market is very strong. The demand for salmon from all segments has increased significantly in the last quarter, leading to high prices. Compared to same quarter last year, the salmon prices increased around 37% in this quarter, despite higher volumes sold", he says.

High prices, together with limited supply, markets that, after Covid-19, seem to be normalizing, and the investments planned to face biological problems (the company has entered at term sheet for a €700 million sustainability-linked credit facility with a number of sustainability targets), make Jacobsen confident about Bakkafrost's future: "We are convinced that our strategy and investments will reduce the biological risk by ensuring stronger biology, which is crucial to maintain a competitive operation".

Bakkafrost is the largest salmon farmer in the Faroe Islands and the second one in Scotland. The company is fully integrated from feed production to smolt, farming, value-added products and sales, with production of fishmeal, fish oil and salmon feed in the Faroe Islands and primary and secondary processing in the Faroe Islands and Scotland.

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