Bakkafrost hails ‘excellent’ Q4 results

Regin Jacobsen, Bakkafrost

THE Faroese salmon farming company Bakkafrost Group today announced a total operating profit (EBIT) of 331.2 million Danish kroners in the final quarter of 2017 – down from the corresponding 2016 quarter of DKK 349.6 million, mainly due to the fall in salmon prices.
The Q4 harvested volumes totalled 11,5000 tonnes (12,900 tonnes in Q4 2016) gutted weight, while combined farming and VAP segments made an operational EBIT of DKK 265.4 million (Q4 2016 DKK 340.9 million) . The board is recommending a dividend of DKK 10.50 (NOK 13.65) per share.
The group said the farming segment made an operational EBIT of DKK 228.8 million. The salmon spot prices decreased in the final part of last year, compared to the previous quarter and this had a negative effect on the operational EBIT in the farming segment.
The VAP segment made an operational EBIT of DKK 36.5 million, which is an improvement due to the decrease in the salmon spot prices in Q4 2017.
Bakkafrost trans­ferred 3.4 million smolts, and Havsbrún sourced 50.9 thousand tonnes of raw material in Q4 2017.
Bakkafrost CEO Regin Jacobsen delivered an upbeat assessment, saying: ‘Bakkafrost had an excellent performance in the quarter, considering that the salmon spot price has decreased by over 25 per cent compared to the same quarter last year.
‘The VAP segment had a positive margin in the quarter for the first time since 2015. Havsbrún had a record year in raw material sourcing during its 50 years long history.
‘Looking forward, we are excited about the agreement we have made with P/F Fiskaaling and the Faroese authorities about the Faroese broodstock programme [which Bakkafrost agreed last year to develop]…we believe this might be an exciting project, which can benefit us in the long run.’
In its outlook report, Bakkafrost said the sharp drop in salmon prices during the second half of last year was largely expected, due to the combination of high prices and supply ramp up.
The two most important global farming regions, Norway and Chile, increased their volumes significantly in Q4 2017, compared to same period in 2016, and the strong supply increase is the main driver for the price drop in Q4 2017.
The latest update from Kontali Analyse estimates that the global supply of Atlantic salmon increased around 12 per cent in Q4 2017, compared to Q4 2016. The global harvest growth is expected to be around six per cent this year.
Bakkafrost operates in the main salmon markets, Europe, the US, the Far East and Russia.
Picture: Bakkafrost CEO Regin Jacobsen