SalMar reports high levels of farming activity despite cost inflation

SalMar reports high levels of farming activity despite cost inflation

SalMar continued solid operational performance has led to strong results in the third quarter of 2022. The total Group operational EBIT was NOK 1,313 million and the total harvest was 53,600 tonnes. This resulted in an operational EBIT of NOK 24.51 per kg.

The total operational EBIT for Norway for the third quarter was NOK 1,309 million (NOK 26.29 per kg). In addition, fish farming in Central Norway and Northern Norway continued to deliver solid results despite general cost inflation.

On the other hand, the underlying operational performance of the Icelandic operation was stable. But lower spot prices reduced the margins. Besides, upgrade of Ocean Farm 1 is progressing according to plan.

Finally, sales and Industry had high levels of activity at its harvesting and processing plants. Also, it has increased its results significantly from the previous quarter.

"Despite cost inflation on feed, Fish Farming in Central Norway and Fish Farming in Northern Norway continue to deliver solid results. Driven by a consistently good operational performance. The operational performance is particularly impressive in Northern Norway, which posts yet another very good result", said SalMar's CEO Frode Arntsen.

"Through the third quarter, we have had a record high volume through our harvesting and processing facilities. And I am particularly pleased to see that the development of our new facility at Senja in northern Norway, InnovaNor, improves with each passing week. This strengthens our belief in our growth ambitions going forward," added SalMar's CEO Frode Arntsen.

In 2023, SalMar expects significant volume growth from 215,000 tonnes. Up to over 280 000 tonnes, including its relative share in Scottish Sea Farms.

Norwegian resource tax

The Norwegian government proposed to introduce a resource tax on aquaculture of 40% with effect from the tax year 2023 for volumes above 4-5,000 tonnes MAB. A hearing is underway with feedback due in January 2023. This will have a major impact on the capacity for innovation and investments in the Norwegian aquaculture industry.

"In the light of the uncertainty surrounding the Norwegian government's tax proposal, SalMar has decided to put future investments on hold. And has already canceled investments. SalMar works actively with relevant actors to ensure that predictable framework conditions are put in place. Also, that does not inhibit the innovative power and value creation in the local communities of the aquaculture industry," says SalMar's CEO Frode Arntsen.

"The proposal that has been submitted for consultation involves an increase in the tax on seafood production, from 22 to 62%. No other country has introduced a tax of this kind and at this level on its food production. Both level and structure will divert investments from aquaculture in Norway to other countries and other industries. This will strongly affect innovation power and investments on the Norwegian coast. The tax will mean a sharp confiscation of investment capital for innovation and industrial construction in aquaculture and adjacent and other industries," adds Arntsen.

SalMar/NRS merger

In October, the European Commission cleared SalMar's acquisition of a majority of the shares in NTS ASA. Consequently, the merger between SalMar and Norway Royal Salmon ASA (NRS) is now a reality.

"The strategic and operational rationale linked to the transaction is still good. Even if the industry has to scale back and reduce other planned investments, the need for increased efficiency and economies of scale has now become even greater. We are therefore very happy to have completed this important transaction," noted Arntsen.

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