Salmon Evolution reports strong biological performance in Q3

Norwegian land-based farmer Salmon Evolution, which uses a hybrid flow-through system, expects to significantly ramp up harvest volumes in the fourth quarter.
Trond Håkon Schaug-Pettersen, Salmon Evolution CEO.
Trond Håkon Schaug-Pettersen, Salmon Evolution CEO. Photo: Salmon Evolution.

Salmon Evolution reports strong biological performance and an all-time high biomass production in its results for Q3 2023.

The company achieved a standing biomass of 2,100 tonnes at the end of September, with a biomass production of 1,290 tonnes in net growth. Salmon Evolution also completed stocking its 9th batch of fish at the end of October, bringing the steady-state number of individual fish at its land-based hybrid flow-through facility at Indre Harøy to approximately 1.5 million.

The company harvested 185 tonnes HOG during the quarter, "with 96% superior share, tight weight concentration and good price realization".

It now says it expects a "significant ramp up" of harvest volumes during the fourth quarter, expecting to harvest 1,000-1,200 tonnes HOG, and is "on track" for production costs on a par with conventional farming.

Operating loss of NOK 25.9 million, but increased revenues compared with last year's Q3

In the third quarter, Salmon Evolution recorded operating revenues of NOK 15.9 million, compared with NOK -0.2 million in Q3 2022. Most of this, the company notes, was related to harvest of the first fish group in batch 3.

However, after fair value adjustment related to the biomass of NOK 14.8 million, the Group recorded an operating loss of NOK 25.9 million compared to NOK 16.1 million for the same period in 2022.

Salmon Evolution facilities at Indre Harøy, Norway.
Salmon Evolution facilities at Indre Harøy, Norway. Photo: Salmon Evolution.

Phase 2 of Salmon Evolution's Norwegian facility in progress

Salmon Evolution is now in the process of completing Phase 2 of its land-based flow-through facility at Indre Harøy, which will see its production capacity increase to 16,000 tonnes HOG per year, with 50% of the facility completed.

Currently, the company says it is focusing on design, engineering and cost optimization with its contractors, with Phase 2 blasting and excavation works completed during Q3.

Salmon Evolution said it estimated a Capex for Phase 2 of between NOK 1,600-1,700M, while the final investment decision on completion of the design phase is expected during the first quarter of 2024.

Salmon Evolution plans North American expansion, looking at locations with established salmon farming industry

"The North America expansion is an integral part of Salmon Evolution’s strategy towards a production capacity of 100,000 tonnes HOG," the company said in its Q3 report.

Salmon Evolution plans to locate its new North American facility in a traditional salmon aquaculture area, the company confirmed.

"With respect to potential sites, focus is centred around areas with an established salmon farming industry, mirroring the Group’s approach for Indre Harøy in Norway," the company said.

"Salmon Evolution sees a significant value in leveraging existing aquaculture infrastructure and value chains, enabling both scale and cost leadership."

The company said that it expected the process of acquiring a suitable site and then regulatory approval will take approximately three years.

According to this timeline, construction on Salmon Evolution's new site would begin in 2025 or 2026, the company said, where "the plan is to build a full scale 31.5 tonnes HOG “Indre Harøy” facility drawing on the experiences learned from Norway."

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