"The company's number one priority commercially is to achieve profitability at the current, annual production level of approximately 10,000 tons," Norcod said in its quarterly report.
Norcod AS
Norcod has reported strong financial results for the second quarter of 2024, showcasing significant revenue growth and improvements in operational efficiency.
The company recorded revenues of 86 million NOK (EUR 7.35 million / USD 7.93 million), a substantial 121% increase compared to the 39 million NOK (EUR 3.33 million / USD 3.60 million) reported in the same quarter of 2023.
This growth was driven by a 76% rise in harvest volume, reaching 1,830 tons WFE (whole fish equivalent), up from 1,038 tons in Q2 2023.
Despite the increase in revenue, Norcod reported an operating loss of 47 million NOK (EUR 4.02 million / USD 4.33 million), though this marked a 34% improvement from the 71 million NOK (EUR 6.07 million / USD 6.54 million) loss recorded in Q2 2023.
This, the company says is "mainly explained by higher harvest volume compared to the corresponding quarter last year and by the additional cost base from structural changes in the Group following the consolidation of Kråkøy Slakteri from the second half of 2023."
The production cost per kilogram of fish also decreased significantly to 47.6 NOK (EUR 4.06 / USD 4.39), down from 77.4 NOK (EUR 6.63 / USD 7.13) per kilogram in the same period last year, reflecting better biological performance and feed efficiency.
During the quarter, Norcod has harvested a total of 1,830 tons, and completed a production cycle at its Jamnungen site in Frøya, achieving an economic feed conversion ratio (EFCR) of 1.06, and producing 175 tons.
However, the "vast majority" of the cod harvested in the quarter came from Norcod's joint venture with fellow cod farmer Kime Aqua at its Forså site in Troms county, Norway.
All of the harvested fish were processed at Norcod's harvesting facility, Kråkøy Slakteri.
The company reports that it now holds 49% of its total biomass volume at sea, with a standing biomass of 7,080 tons at the end of the quarter.
During the second quarter, Norcod also launched the "Snow Cod" product brand, positioning farmed cod in a premium niche market.
This strategy, supported by the Norwegian Seafood Council, aims to differentiate farmed cod from wild-caught cod and present it as a versatile, high-quality product akin to "white salmon."
Norcod refers to this in its report as "Salmonification" and says "replicating the salmon story is our game plan", by providing a "reliable supply of high-quality, sustainable cod all year round "and presenting this as "a versatile product that fits well with consumer trends".
Looking ahead, Norcod says it is focused on achieving profitability at its current production level of approximately 10,000 tons annually.
The company says it has "initiated measures to focus resources in key areas, improve the company's financial performance, streamline operations and develop a more efficient and commercially oriented business."
Despite potential risks from global economic instability and geopolitical unrest, Norcod said it believes the favourable market conditions provide a strong foundation for the ongoing growth of the farmed cod industry.
To achieve its goals, Norcod says it plans to focus on two key areas, firstly of cod biology and optimizing feeding and production processes, and secondly market developing and positioning of its product in a "premium niche category".
