"The value creation in the quarter demonstrates the powerful interaction between dedicated employes and high performing sites," says CEO Helge Kvalvik.
Photo: Måsøval.
Måsøval AS has reported robust financial and operational performance for the second quarter of 2024, with revenues reaching NOK 934 million (EUR 81.8m / USD 88.5m), up from NOK 804 million (EUR 70.4m / USD 76m) in Q2 2023. This growth is attributed to higher salmon prices and increased sales volume - despite a period characterised by market fluctuations.
“Salmon prices were a real roller coaster this quarter with large volatility," said CEO Helge Kvalvik.
"Our harvesting profile was somewhat tilted towards the end of the quarter when prices were low. Nonetheless, we realized prices that were NOK 8 (EUR 0.70 / USD 0.76) higher than the same quarter last year.”
The farming segment, the company’s largest, performed particularly well. Operational EBIT for the group rose to NOK 298 million (EUR 26m / USD 28m), up from NOK 211 million (EUR 18.5m / USD 20m) in Q2 2023, driven by both higher achieved prices and lower costs.
Meanwhile, the operational cost per kilogram harvested decreased significantly to NOK 50.7 (EUR 4.44 / USD 4.80) from NOK 63.4 (EUR 5.55 / USD 6.01) in the same period last year.
“I am very satisfied with the operational performance in the farming segment this quarter. The segment achieved strong margins driven by a combination of lower costs and higher prices. Realized cost was NOK 51 pr KG GWE for the group in the quarter which is a significant improvement from last year realized cost of NOK 63 in the same quarter," Kvalvik said.
"I am proud to see region west delivering improvements and a record strong margin. The value creation in the quarter demonstrates the powerful interaction between dedicated employes and high performing sites," the CEO added.
While the farming segment enjoyed success during the quarter, Måsøval's Sales & Marketing segment delivered a more disappointing performance, reporting an operational EBIT loss of NOK 8.1 million (EUR 0.71 million / USD 0.77 million).
The segment was negatively impacted by a sharp decline in market prices during a period of high harvesting, as well as additional costs related to legal expenses and the recall of fish following an investigation which found that Pure Norwegian Seafood (PNS) had been selling frozen salmon that did not meet Norwegian regulations for human consumption.
In response to this, Måsøval says in it has "focused on securing operations and jobs during the period following the revelations. Måsøval terminated our long-term sales and processing agreement with PNS, which is how we would handle any agreement in a similar situation. At the same time, we entered into a temporary agreement with PNS for the remaining 2024."
"Måsøval believes there is a basis for continuing the operation of the PNS processing plant going forward – even with a reduced volume from Måsøval. However, the sales department at PNS has negatively affected the results in Måsøval’s sales and processing segment," the report continues.
Despite these challenges, the company says it is taking steps to improve this segment by establishing a fully integrated, in-house sales department, including the potential acquisition of Pure Norwegian Seafood’s sales operations.
"Måsøval is in the process of establishing our own sales department, which is fully owned, controlled, and integrated by Måsøval. As part of this effort, Måsøval has entered into a letter of intent with PNS for the acquisition of their sales department. This agreement covers sales, logistics, and the systems related to sales operations. The intent is to retain a skilled and knowledgeable sales department, with control over the entire value chain," the company states.
The quarterly report also notes that Måsøval AS is still involved in an ongoing court case against the Norwegian State, seeking compensation for losses incurred due to a misdiagnosis of Pancreas Disease (PD) at their Kattholmen facility in 2019.
In December 2023, the court ruled that the Norwegian state must pay Måsøval NOK 12.8 million (EUR 1.12 million / USD 1.21 million) in compensation. However, both parties have appealed the verdict, and the case is currently before the Court of Appeal, with a final decision expected soon.
“Looking ahead I am very excited for the new harvesting plant TL52 to become operational in September. I strongly believe the value chain will improve from tighter integration of the sales and processing segment. The new processing plant will provide flexibility, stability and new opportunities," Kvalvik said.
The company projects an annual harvest of 26,500–27,500 GWT for 2024, up from 24,500 GWT in 2023. The group also expects to harvest between 7,000–7,500 GWT in Q3 2024, with an expected rise in costs from the very low levels experienced in Q2.
