NRS upbeat despite Covid hit
Norway Royal Salmon has reported much reduced operating profits for the final quarter of last year, with the fallout from the coronavirus pandemic largely to blame.
The Q4 operational EBIT was NOK 17m (£1.45m) and the EBIT per kilo NOK 5.05. The corresponding figures for the same quarter in 2019 were NOK 136m (£11.6m) and NOK 17.71.
The Q4 harvest was 13% lower at 7,148 tonnes gutted weight.
Despite this, the board is recommending a dividend of NOK 3 per share for the whole of 2020.
CEO Charles Høstlund explained: “The market price of salmon has been affected by the Covid-19 pandemic and has been low during the quarter.
“Our margins in this quarter were affected by this, even though production costs have been reduced slightly from the previous quarter.
“The biomass in the sea has increased during the quarter and is 15% higher than at the end of the same quarter last year. This leads to [the fact] that NRS has almost fully utilised our licences at the end of the quarter.”
NRS achieved operating revenues of NOK 5.1bn (£437m) and an operational EBIT of NOK 246m (£22m). The harvest volume for this year is expected to be around 40,000 tonnes, which is an increase of 31% on the 2020 figure of 30,509 tonnes.
The CEO said NRS has a solid financial position with NOK 1,422m (£122m) in available credit facilities at the end of the quarter. It had also strengthened its financial capacity during the period and has been granted an increased loan facility of NOK 800m (£68m) with a sustainability loan.
NRS owns a 50 per cent stake in Iceland’s Arctic Fish which will be listed on the Oslo Euronext Growth exchange on Friday, after its NOK 600m offering was several times oversubscribed yesterday.
Høstlund said Arctic Fish has significant growth potential and expects to harvest 12,000 tonnes this year, rising to around 24,000 tonnes by 2025.