SalMar reports strong Q2, but SSF continues to disappoint

SalMar today reported a 2023 second quarter operational EBIT or profit of NOK 1,745 million (£130m) – around £55m higher than for  same period last year.

The world’s second largest Atlantic salmon farmer said Norway delivered the strongest performance with an EBIT of NOK 1,790m (£132m), adding that Scottish Sea Farms in which it owns a half share, delivered weak results due to biological challenges.

These challenges now mean the volume guidance for SSF has been reduced to 27,000 tonnes.

As expected, a low slaughter volume took place in Iceland during the period to optimise biological performance.

SalMar also reports that its joint offshore operation, SalMar Aker Ocean’s Ocean Farm 1 started its third production cycle in early May and expects slaughter to start in early 2024.

Earlier this month, Goldman Sachs Asset Management completed the purchase of 72.11 per cent of the shares in the wellboat supplier and aquaculture services business Frøy ASA from SalMar’s wholly-owned subsidiary NTS, against a settlement consisting of NOK 4.8 billion in cash consideration.

SalMar CEO Frode Arntsen said: “We report strong results that are largely in line with our expectations, and good progress in our work to integrate NRS, NTS and SalmoNor into SalMar.

We have recently signed a refinancing package, and strengthened our balance sheet through the sale of shares in Frøy. All this gives us an even stronger basis for further growth,

In recent years, the company has made significant investments along the entire value chain.SalMar operates innovative RAS hatcheries, coastal farming locations, offshore units and has several state-of-the-art facilities on land for the slaughter and processing of salmon.

He added: “We are clear that our ambition is to continue to grow and create value for society and for our shareholders. How quickly and how much depends to a large extent on the effects of the ground rent tax that has been introduced in Norway. According to our preliminary calculations, the implementation effect alone amounts to NOK 2.3 billion.”

He said that SalMar would continue to campaign for changes to the tax system imposed on the salmon farming sector. SalMar would be “open to pursue legal steps in due course” but “will continue open and fact-based dialogue with authorities”.

The impact of the new tax has not been included in the financial results for Q2.

 

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