Bakkafrost issues Q2 profit warning
Bakkafrost today issued a profit warning and issued early preliminary results for the second quarter of this year, which look to be nearly 40% down on last year’s Q2 numbers.
The company said the main problem was the “extraordinarily low” harvest volumes in the Faroe Islands, but added that Scotland also had reduced harvests due to ongoing biological issues.
The Bakkafrost statement said preliminary results indicated an EBIT or operational profit of 353m Danish kroner (£40.7m). This compares with DKK 587m (around £70m) in Q2 last year.
Today’s statement from CEO Regin Jacobsen said: “The main drivers for the results are the extraordinarily low harvest volumes in the Faroese farming segment and the reduced average weight of the harvested fish.
“In addition, the Scottish farming segment has had lower harvest weights in Q2, compared to the previous quarter, primarily caused by biology-led harvest at some sites and early harvest at some sites to reduce biological risk ahead of Q3.
“In general, price achievements for fresh salmon have reduced during the quarter. The low harvest volume in the Faroese farming segment harmed the cost of harvested fish as fixed costs were less diluted on the harvest volume.”
Jacobsen continued: “Also, exceptional mortality costs have been recorded in the quarter. In the Faroes, this amounted to around DKK 32m (£3.7m) and covered seawater as well as freshwater, where accident-driven mortality events occurred during the start-up of the new expansions of the Glyvradal and Norðtoftir hatcheries.
“In Scotland, DKK 43m has been expensed caused by accident-driven mortality during the start-up of the Applecross 4 hatchery expansion and due to elevated mortality caused by viral diseases at some marine farming sites, as previously disclosed in Bakkafrost’s 2023 Capital Markets Day presentation. “
Bakkafrost has revised the 2023 full-year harvest volume for the Faroe Islands to 63,000 tonnes. The 2023 full-year harvest volume for Scotland is unchanged at 30,000 tonnes.
Shares in the company fell 10% on the Oslo Stock Exchange, following the announcement.
The full Q2 2023 report will be released on 22 August.