Quarter of ups and downs for Norway's cod farmers with ambition to scale

Norcod reports operating loss despite increased revenues in Q3, while Statt Torsk confirms merger with whitefish group Vesterålen Havbruk after a challenging year.
Gustave Brun-Lie CEO of Statt Torsk and Brynjar Kvaernstuen, CEO of Vesterålen Havbruk.
Gustave Brun-Lie CEO of Statt Torsk and Brynjar Kvaernstuen, CEO of Vesterålen Havbruk.Photo: Vesterålen Havbruk / LinkedIn.

Norway's cod farmers are seeking to scale up the industry and achieve continuous production, making the most of market demand as wild catch quotas are set to decrease in coming years.

The third quarter of 2023 has seen some milestones achieved despite a challenging year overall for cod farming in Norway.

Statt Torsk and Vesterålen Havbruk join forces to scale up cod farming

In recent days, the merger of cod farmer Statt Torsk with larger whitefish company Vesterålen Havbruk was given the go-ahead by the relevant boards, the companies announced.

Statt Torsk has had a challenging year, reporting an operating loss for Q3 2023 of NOK 59 million (EUR 5 million / USD 5.3 million), with an overall operating loss of NOK 79.5 million (EUR 6.7 million / USD 7.1 million) for the first 9 months of the year.

The company underwent restructuring in August, resulting in 8 job losses, and decided to postpone production at its new Rekvika farming site, making a dent in its finances of NOK 50 million in costs.

The merger will see Statt Torsk de-list from the Oslo stock exchange, and gives the new Vesterålen Havbruk-owned entity a much-needed cash boost and a steadier footing for future scale-up.

Merger will enable combining harvests from different sites, for year-round supply

Announcing the deal back in September, Statt Torsk CEO Gustave Brun-Lie said the merger "solves our imminent needs of cash reflecting the true values of our companies in the current market; but most of all it is a strategic move of consolidation of our young industry. A business combination with Vesterålen Havbruk is our preferred option to optimise shareholder value.”

Meanwhile, Brynjar Kværnstuen, CEO of Vesterålen Havbruk said the merger "will give the new entity flexibility to deliver cod to market year-round in the future, combining harvests from sites in the north and south," adding, "With decreasing quotas on wild cod in the coming years, the timing for scaling farmed cod has never been better."

The new entity predicts a harvest of 3,500 tonnes of farmed cod this year, with the aim of producing 12,000 metric tons by 2025.

Norcod has expanded its production capacity with new Nordland farming site.
Norcod has expanded its production capacity with new Nordland farming site. Photo: Norcod.

Norcod increases production capacity, achieves good biomass growth

Meanwhile, last week, fellow cod farming company Norcod posted its results for the third quarter, reporting an operating loss despite a substantial increase in revenue growth and "strong operational performance".

The company said it had "achieved significant milestones" at the same time as experiencing "notable changes in various aspects of our business". Among these were the strategic acquisition of fish slaughterhouse Kråkøy Slakteri and its new Bjørnvika production site in Nesna municipality, in Norway's Nordland county.

“Bjørnvika’s ideal conditions make it a perfect fit for our goal of providing premium cod sustainably," the company said in its Q3 report.

"This addition of capacity brings Norcod’s total number of production sites to six along the Norwegian coastline, with 17,500 tonnes MAB (maximum standing biomass) in total," it stated.

Norcod posts operating loss but grows revenues, eyes "new phase in operations" with continuous harvest

Revenue growth for the quarter reached NOK 24 million, marking a significant increase from the same period last year, where revenues stood at just NOK 2 million. "This impressive growth reflects our dedication and strategic efforts to expand our market share and enhance our offerings," the company said in a LinkedIn statement.

"Strong operational performance has characterized the third quarter of the year. Feed and fish performance has been on or above budgeted targets," the company said in its report.

However, Norcod delivered an overall operating loss of NOK -28 million (EUR 2.3 million / USD 2.5 million), widening from last year's NOK 3 million (EUR 250,000 / USD 268,000). Cash flow from operations also significantly dropped, reaching NOK -131 million, compared with NOK -88 million in Q3 2022.

"By the end Q3, the YoY standing biomass was up 7%. However, continuously developing the company to secure a safe and profitable production process is crucial. Norcod’s initiated measures on lighting regime and feeding strategy will always be in the midst of the company’s production strategy," the company said in its report.

Norcod harvested 144 tons during the quarter, up from zero tons during Q3 last year. Norcod has set a production target of approximately 25,900 tonnes (whole fish equivalent ) annual harvest by 2027, CEO Christian Riber indicated in June 2023.

"Going forward, the harvesting process will run continously, marking the beginning of a new phase in our operations," Norcod said in a LinkedIn post announcing the results.

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