Asset sale boost for Norway Royal Salmon

Norway Royal Salmon CEO Charles Høstlund

NORWAY Royal Salmon today reported lower margins for both the final quarter last year and for the whole of 2019.

But the results are generally seen as reasonably satisfactory and the company benefited considerably from the substantial asset sale of its southern Norwegian business to local fish farming companies.

The company announced a Q4 operational EBIT of NOK 136 million (£11.3 million), compared to NOK 233 million (£19.5m) for the same period 12 months earlier.

Higher costs meant the EBIT per kilogramme was also lower, at NOK 16.71 against NOK 17.73 in 2018.

For the full financial year of 2019, NRS produced operating revenues of NOK 5.6 billion, and achieved an operational EBIT of NOK 543 million or £45.4 million (NOK 642 million in 2018).

However, the board is recommending a much higher dividend this year – NOK 10 per share, compared to NOK 6 per share last year.

The sale of region south, completed in the week before Christmas, resulted in a gain after tax of NOK 922 million (£77 million), reducing the debt bearing interest by NOK 893 million, down to just NOK 33 million.

CEO Charles Høstlund said higher production costs had reduced margins during the final quarter, despite a rise in salmon prices.

He added: ‘NRS shall grow through sustainable growth. The group has at the end of the quarter 20 per cent higher biomass in Region North compared with the corresponding quarter last year.

‘In the fourth quarter, the group was granted NOK 400 million in green funding and 75 per cent of the NRS’s sites are now ASC certified.

‘It is gratifying to see that the commitment to sustainable production results in more favourable loan terms and is appreciated by the bank.’

NRS harvested 9,070 tonnes gutted weight in the quarter, down by 34 per cent. Of this, 8,243 tonnes of the total volume were harvested in Region North (largely Troms and Finnmark) and 826 tonnes in Region South.

The estimated harvest volume for 2020 is 37,000 tonnes, an increase of 36 per cent. The sales business produced sound results in Q4 , selling 24,726 tonnes of salmon.