Bakkafrost delivers strong Q3 results

Bakkafrost CEO Regin Jacobsen

FAROESE fish farmer Bakkafrost today announced strong third quarter results and some of the lowest mortality rates for many years.

Harvested volumes rose by more than 5,000 tonnes to a total of 12,900 tonnes and the combined farming and VAP (value added products) segment saw its operational profit or EBIT rise from DKK 142.4 million in Q3 2018 to DKK 257.3 million this year – despite a 10 per cent fall in salmon prices between July and September this year.

The company reported a total operational EBIT of 303.4 million Danish kroner (DKK), down from DKK 434 million last year.

Bakkafrost said salmon spot prices fell significantly during the period and while this had a negative effect on the farming segment, it did have a positive impact on the operational EBIT in the VAP segment.

The FOF segment (fishmeal, oil and feed) made an EBITDA of DKK 94.5 million (DKK 41.4 million for Q3 2018)

These results are likely to be the last before the inclusion of the Scottish Salmon Company, in which Bakkafrost acquired a 68.8 stake for an estimated £517 million last month.

CEO Regin Jacobsen said Bakkafrost had chosen to increase the company’s share capital for the acquisition of SSC, which meant the acquisition was carried out without substantial increase in its external financing.

Turning to the third quarter performance, he said: ‘Despite 10 per cent lower salmon spot prices during the third quarter for 2019, compared to the same quarter last year, Bakkafrost has delivered strong operational results this quarter.

‘The average size of the harvested salmon has been exceptionally high, which has put us in a very good position to withstand the difficult market situation.

‘The biological performance has been very good with high growth rates for the salmon.’

He added: ‘ Sea lice and mortality rates have been amongst the lowest for many years. This is a result of committed and skilled employees and a strong effort on a continuous improvement of the biology and the welfare of the salmon.’

The company is expected to harvest around 54,500 tonnes of salmon this year without SSC – up by more than 8,000 tonnes on 2018.

But with SSC producing around 50,000 tonnes a year, the new look Bakkafrost group’s total harvest should double in 2020.