Arnarlax's parent company managed to close a difficult year on a positive note.
Photo: Arnarlax.
Icelandic Salmon closed its Q3 2024 focused on biomass growth in pursuit of recovery and, according to Q4 results presented yesterday, the effort has paid off. In the last quarter of the year, Arnarlax's parent company managed to stabilize the biological conditions at sea, and this resulted in higher harvest volumes and weights, as well as good control of sea lice.
"Our team's dedicated efforts have enabled us to end a challenging year on a positive note. We stabilized the biological situation, strengthened sea lice control, and achieved good growth in our biological assets. With increased harvest volume and harvest weight, solid price achievement, and strong performance on smolt released into sea, we are on the right path," said Björn Hembre, CEO of Icelandic Salmon.
However, there is still some way to go on that "right path," and Q4 2024 figures still reflect the challenges Icelandic Salmon - owned by Norway's SalMar, which, yesterday, also presented the Group's Q4 2024 results - has been facing.
As for harvest volumes, these have increased from the low levels recorded in the previous quarters of 2024 reaching 6,455 tons, but the year-on-year comparison with Q4 2023, when 7,219 tons were obtained, shows a decrease of 10.58%.
These lower harvest volumes led to a 3.29% decrease in year-on-year revenues as, in Q4 2024, operating income was EUR 49.9 million, compared to EUR 51.6 million for the same period last year.
Thus, operating EBIT for the quarter was EUR 1.4 million, compared with EUR 2.0 million in the prior-year period, a decrease of 30%.
In addition to lower harvest volumes, the decrease was also driven by cost levels on harvested fish, which were affected by the biological challenges of last winter. The EBIT/kg for the quarter ended at EUR 0.22. Adjusted for the one-off cost, EBIT/kg was EUR 0.31.
Because of the recovery effort still ahead, Icelandic Salmon reported that to further strengthen its financial position, an extension of the sustainability-linked financing agreement with DNB and Danske Bank has been agreed.
This agreement provides an additional EUR 65 million in financing to that already obtained by the salmon company in a sustainability credit secured in November 2023, increasing the total credit line to EUR 160 million.
At the Q4 2024 results presentation, the Group also reported that it continues to work closely with the authorities to reinstate the license for 10,000 MAB tons of sterile salmon in Ísafjarðardjúp, Iceland, which was revoked in the third quarter.
As the company explained now - and WeAreAquaculture already reported - this happened because the Icelandic Food and Veterinary Authority (MAST) did not provide a necessary comprehensive, weighted assessment of the potential risk of the spread of fish diseases and parasites before the license was issued.
Likewise, it also said that efforts to establish larger sites and improve MAB utilization continue, with the expansion of several sites in Arnarfjörður - Iceland too - currently under review. The process has been subject to delays and a final decision is not expected before the end of 2025. In addition, an application for 4,500 tons at Arnarfjörður is still under review.
Despite all the challenges faced, Arnarlax's parent company continues to experience strong demand for its salmon and in Q4 2024 achieved high prices for its products in key markets, with North American and Asian markets particularly strong.
The company reported an average harvest weight of 5.2 kg GWT for the quarter, well above the Norwegian market average of 3.9 kg GWT according to official statistics. Icelandic Salmon noted that this solid performance further underlines its strong market position.
Finally, it said that the biological challenges faced in 2024 are expected to impact the first half of the year and 2025 harvest volumes, with most of the volume expected in the second half. However, for the full year, Icelandic Salmon maintains its volume guidance of 15,000 tons.
