Bakkafrost reports sea lice fight success

Bakkafrost

THE Bakkafrost group disclosed today that its policy of using non-medical methods was  achieving considerable success in the fight against sea lice.

As the Faroese salmon farmer unveiled its second quarter results for 2019, chief executive Regin Jacobsen told investors that there were clear indications that its large smolt strategy, together with the use of lumpfish and mechanical sea lice treatments, was working as intended.

‘Our salmon is only treated with lumpfish, pressurised sea water showers and with fresh water,’ he said.

‘We are very pleased of not having a single site above the threshold level for sea lice during the quarter.’

He added that the company was now focusing on using non-medical methods in treatments against sea lice and had invested in new technology to comply with this strategy.

Bakkafrost delivered a total operating Q2 EBIT (earnings before interest and tax) of 338.8 million Danish kroner (DKK)  (£41.5 million) compared to DKK 408 million (£50 million) in the second quarter of last year.

Harvested volumes were 12.6 thousand tonnes gutted weight (12,900 tonnes in 2018), making a total of 26,316 tonnes for the year so far.

The farming segment made an operational EBIT of DKK 303.4 million. Achieved prices in this quarter increased and thus had a positive effect on the operational EBIT.

The VAP segment made an operational EBIT of DKK 0.0 million. The EBITDA for the fishmeal oil and feed (FOF) segment was DKK 58.4 million.

But lower prices meant the second quarter profit was down from DKK 338.8 million (£41.5 million) to DKK 188.6 million (£23 million).

The profit for the half year is DKK 401.4 million (£49 million) compared with DKK 611.1 million (£75 million) in the first half of 2018.

Regin Jacobsen, however, seemed satisfied and  said: ‘Even though the salmon price was nine per cent  lower in the second quarter of 2019, compared to Q2 2018, the result for Bakkafrost was good for the second quarter.

‘Bakkafrost is well on track with the investment plan, which includes investments of around DKK 3 billion during the period 2018-2022.’

In its market outlook report, the company said  the latest update from Kontali Analysis estimates that the global supply of Atlantic salmon increased by around eight per cent in  the second quarter of 2019.

The growth comes primarily from Norway and Chile, which have increased their harvest during the quarter due to biological issues with algae outbreak and sea lice.

This will most likely affect the global harvest in Q3, which is expected to be around five per cent higher than Q3 2018, and  which is lower than previously expected.

The global harvest growth is expected to be around five to six per cent  in 2019, compared to 2018.

Bakkafrost, which operates in the main salmon markets of Europe, the United States, the Far East and Russia, said it aimed to have a balanced market diversification to reduce risk.

 

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