Norwegian land-based salmon farming company Salmon Evolution reported another profitable quarter in Q2 2024.
Photo: Salmon Evolution.
A new profitable quarter for Salmon Evolution. A record harvest of 1,581 HOG tons, coupled with strong all-in price realization and positive underlying cost development, brought the Q2 2024 operating income of the leading Norwegian land-based salmon farming company to NOK 170.5 million (EUR 14.4 million / USD 15.8 million).
To that, the group added operating EBITDA of NOK 45.4 million (EUR 3.8 million / USD 4.2 million) - farming EBITDA was NOK 58.6 million (EUR 4.9 million / USD 5.4 million) and EBITDA per kg was NOK 37.1 (EUR 3.14 / USD 3.45) -, and positive cash flow from operations of NOK 37.5 million (EUR 3.1 million / USD 3.4 million) in the second quarter of 2024.
"In the first half of 2024 Salmon Evolution had close to 300 million in revenues and a farming EBITDA of almost 100 million, continuing to demonstrate that Salmon Evolution has established a unique, efficient and profitable growth platform," said CEO Trond Håkon Schaug-Pettersen. "We are also very pleased with the Phase 2 financing package completed during the quarter and look forward to continue our growth journey at Indre Harøy," he added.
As said, the record harvest achieved by Salmon Evolution in Q2 2024 of 1,581 HOG tons, was accompanied by a strong total price realization of NOK 106 (EUR 8.98 / USD 9.87) per kg., driven by an industry-leading superior grade share of 96%.
In the second quarter, net biomass growth was 1,261 LW tons, ending with a standing biomass of 2,032 LW tons. The Norwegian land-based salmon farming said its high focus is on restocking the facility and setting the stage for strong growth during H2-24. The average harvest weight was 3.6 kg LW, driven by an opportunistic harvest due to the strong prices and low stock weights during spring/summer 2023.
In this Q2 2024 results presentation, Salmon Evolution also reported that it has revised its harvest expectation for Q3 2024 in the range of 1,200 - 1,300 tons HOG, moving some volume into Q4-24 increasing harvest weights. Thus, harvest in the second half of 2024 is expected to be in the range of 2,400 - 2,600 tons HOG, after the impact of the culling of lot 11 due to poor quality smolts planted in March.
Nevertheless, the land-based salmon farmer said its priority is to enter the 2025 winter season with a fully stocked farm and a solid volume of biomass expected. As such, having identified the root cause that led to these smolt quality issues, it is already taking appropriate actions to normalize the situation, has implemented changes to the smoltification process at its smolt facility, and has said that future groups will receive additional vaccination.
Thus, after breaking even in Q4 2023, and achieving a profit in Q1 2024, Salmon Evolution closed Q2 2024 with a strong financial position, with NOK 983 million (EUR 83.2 million / USD 91.4 million) in available liquidity, including undrawn committed credit lines.
In addition, in its Q2 2024 results presentation, the leading land-based salmon farmer highlighted progress with the expansion of Indre Harøy Phase 2. After completing a successful private placement in June, raising gross proceeds of NOK 365 million (EUR 30.9 million / USD 33.9 million) and an increase of NOK 675 million (EUR 57.1 million / USD 62.8 million) in bank facilities to finance the project, the company announced the agreement with HENT and Artec Aqua whereby the Phase 2 farming project moved into the construction stage.
To finance the Phase 2 expansion, the company will use a combination of debt, available cash equity, and free cash flow. The project has an estimated investment of NOK 2.2 billion (EUR 195.2 million / USD 208.6 million), as well as NOK 200 million (EUR 17.7 million / USD 18.9 million) in project contingencies.
Construction is scheduled to begin in the third quarter of 2024. As Salmon Evolution explained last year, the project will be split into two parts: HENT will assume responsibility for civil design and construction, while Artec Aqua will be responsible for the design, construction, and commissioning of the process facility.
