Måsøval presented its Q3 2023 results today. Good news for the Norwegian family-owned company which, after losses in Q1 and financial challenges in Q2, has seen its operating EBIT in the third quarter almost double that of the same period last year, NOK 113 million (EUR 9.6 million - USD 10.5 million) versus NOK 62 million (EUR 5.3 million - USD 5.8 million), an increase of 82.26%. Strong results despite the Norwegian resource rent tax that has led the company to undertake a reorganization that is expected to be completed by January 1, 2024, and will turn the company into a holding company.
If, as said, Måsøval's operating EBIT in Q3 2023 increased by more than 80% compared to Q3 2022, operating income was not far behind either. It was NOK 670 million (EUR 57.3 million - USD 62.8 million) in this third quarter, up 77.25% from NOK 378 million (EUR 32.3 million - USD 35.4 million) in the same period last year. This was even though operating EBIT was negatively affected by the smolt cull in the Western region, which led to a NOK 9 million (EUR 770.9 thousand - USD 843.8 thousand) increase in costs in the quarter.
In its quarterly report, the company has attributed this revenue increase to two main reasons: higher harvested volume and higher average selling prices. The total harvested volume this year was 7,037 tons compared to 4,863 tons last year, while the average price per kg was NOK 82.8 (EUR 7.09 - USD 7.76) in Q3 2023, compared to NOK 63.5 (EUR 5.44- USD 5.95) in 2022.
The group's profit before tax amounted to NOK 105 million (EUR 8.9 million - USD 9.8 million), and tax expenses to NOK 56 million (EUR 4.7 million - USD 5.2 million). Måsøval has fully booked the resource rent tax for the first 9 months of 2023 in this third quarter. The total amount amounts to NOK 33 million (EUR 2.8 million - USD 3 million), of which NOK 11 million (EUR 942.4 thousand - USD 1 million) relates to Q3.
However, the company warned: "Resource rent tax for the period is estimated based on our understanding of adopted rules. The estimate is highly uncertain due to uncertain interpretation of the regulations."
As known, this year, the Norwegian government introduced a 25% resource rent tax on salmon production in Norway. Known as the 'salmon tax', it only applies to salmon production at sea and not to the entire production cycle therefore, to adapt to the new regulations, Måsøval announced last September a reorganization process that, as mentioned, is expected to end on January 1, 2024.
"In order to streamline both the management of the Group and public reporting, the aim is to split different parts of the business into separate legal entities. In September, a reorganisation was therefore decided whereby the parent company Måsøval AS becomes a holding company, all the Group’s licences are merged into one company, Måsøval Lisens AS and the farming operation of the Group in another company, Måsøval Drift AS," the quarterly report Q3 2023 stated.
Regarding the farming outlook, the group maintains its forecast of 24,300 tons in 2023, with 7,700 tons expected in Q4. In addition, it noted that with the new co-location agreement with Frøya Laks, Måsøval's potential license portfolio exceeds 33,000 tons.
Furthermore, the company has also remarked that the average salmon price is expected to increase in Q4 2023 compared to Q4 2022. That forward average salmon price for Q4 2023 is NOK 82.87 (EUR 7.10 - USD 7.78), while for 2024 it is NOK 95.85 (EUR 8.21 - USD 9.00).
Måsøval AS is an integrated producer of Atlantic salmon with more than 50 years of operational experience. Located in Central Norway in the region west of Trondheim, the company has both significant farming operations at sea and in-house smolt production. Through its majority ownership in the processing and distribution company Pure Norwegian Seafood AS, Måsøval is processing and exporting high-quality Atlantic salmon to a global marketplace.
