SalMar: solid operational performance in Q3, but offshore put on hold

Salmon farming giant SalMar said results "particularly good" in Norway, but regulatory uncertainty means it will hit the pause button on further offshore developments, focusing on "semi-offshore" instead.
Ocean Farm 1 of SalMar Aker Ocean, the world's first offshore salmon farm.
Ocean Farm 1 of SalMar Aker Ocean, the world's first offshore salmon farm.Photo: SalMar.

"We have put behind us another good quarter, especially in our Norwegian operations. This has given strong results," said Frode Arntsen, SalMar CEO, announcing SalMar's results for the third quarter of 2023.

The Norwegian salmon farming group achieved a remarkable 75% increase in its operational profit in Q3.

Operational EBIT for the group as a whole stood at NOK 2.3 billion (€192.2 million/$205.6 million), compared with NOK 1.31 billion last year. Farming in Norway alone delivered EBIT of almost NOK 2.3 billion, with harvest volumes increasing while cost levels were reduced.

The group's overall harvest for the quarter stood at 78,100 tonnes, with 74,000 of this provided by its Norwegian operations, delivering an operational EBIT per kg of NOK 30.7 (NOK 29.5 for the group as a whole).

"Our fish farmers in Central and Northern Norway have achieved good biological results which leads to good financial results. On land our staff and operators in Sales and Industry have handled large volumes well,” Arnstsen said.

Outside of Norway: challenges and opportunities

But while the quarter was an overall success for the salmon giant, its business segments outside of Norway showed weaker results.

Icelandic Salmon, which has recently suffered setbacks due to biological problems, had managed to recover production after its harvest stoppage in Q2 - but higher costs dampened its results.

Meanwhile, SalMar's 50%-owned Scottish Sea Farms, although improving, remained weak due to "continued biological challenges", the company said.

Within Norway, despite its solid farming performance, some uncertainties remain. The Norwegian government has not yet clarified the tax rate for offshore aquaculture, meaning SalMar has chosen to wait, directing its efforts and investments elsewhere.

"Due to regulatory uncertainty SalMar Aker Ocean has decided that further work on offshore aquaculture in Norway is currently on hold," the company said in a statement.

"The company will now fully focus on growth semi-offshore and utilize the capacity of its existing two semi-offshore units for the production of sustainable Norwegian salmon. It will also continue to explore opportunities outside of Norway."

SalMar expects "significant volume growth" in 2024

The company says it expects volume to grow significantly next year, as "unutilized potential in licenses is starting to materialize".

In Norway, SalMar expects 257,000 tonnes, with a further 7,000 tonnes from SalMar Aker Ocean. Icelandic Salmon is predicted to produce 15,000 tonnes and Scottish Sea Farms 37,000 tonnes.

"Including relative share from Scottish Sea Farms this gives a total of 298,000 tonnes and represent a growth of 9% from volume in 2023," the company said.

For 2023 as a whole, SalMar is maintaining its harvest volume guidance unchanged in Norway at 243,000 tonnes. It predicts an increase of 1,000 tonnes in Iceland, raising its total to 17,000 tonnes, while it is decreasing its guidance for Scottish Sea Farms by 2,000 tonnes to 25,000 tonnes.

In 2024, SalMar's volume guidance is 257,000 tonnes in Norway, 7,000 tonnes from SalMar Aker Ocean, 15,000 tonnes for Icelandic Salmon and 37,000 tonnes for Scottish Sea Farms.

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