SalMar upbeat about Scottish Sea Farms

SalMar CEO Olav-Andreas Ervik

NORWEGIAN fish farming giant SalMar said 2018 had been a good year for Scottish Sea Farms, the UK business it part owns with Lerøy Seafood.
In its annual report, SalMar reveals that Scottish Sea Farms generated operating revenues of NOK 2,057 million (£183.4 million) last year, compared with NOK 2,088 million (186.23 million) in 2017.
The decline was due to biological challenges at the end of 2017, along with changes in the company’s operating structure.
Harvest volumes totalled 27,500 tonnes, down from 31,000 tonnes in 2017 for the same reasons. The harvest prediction for this year is up by almost 10 per cent to 30,000 tonnes.
SalMar said: ‘Sound underlying operations ensured high weight at harvest, good price achievement and a reduction in costs.
‘The company therefore made an operational EBIT of NOK 661 million (£58.95 million) in 2018, only slightly below the NOK 669 million (£59.6 million) achieved in 2017.
‘Operational EBIT per kg gutted weight came to NOK 24.10 in 2018, a rise of NOK 2.50 per kg from 2017. This is largely attributable to higher price achievement.’
SalMar’s share of the profit came to NOK 265 million in 2018 (£23.6 million) compared with NOK 272.8 (£24.3 million in 2017).
The group was also confident about the long term prospects for Arnarlax, its Icelandic subsidiary, in which it took a controlling interest a few week ago.
Although described as a young company, leading the development of sustainable aquaculture in Iceland, last year was seen as challenging for the business due to disease and a high rate of attrition. As a result, revenues fell from NOK 625.4 million to NOK 400.4 million
SalMar’s main activities are firmly rooted in central and northern Norway, where harvest volumes last year totalled 142,500 tonnes.
Total group revenues last year reached NOK 11.343 million (just over £1 billion) and up from NOK 10.817 million in 2017.
Chief executive Olav-Andreas Ervik said 2018 delivered the best results in the group’s history, driven by continued strong global demand for salmon and high prices,
‘Another milestone was reached when we harvested the first salmon from the sea farm Ocean Farm 1 with very promising results. This strengthens us in the belief that farming salmon further out to sea is the right way to go.
‘SalMar completed the first production cycle at the Ocean Farm 1 facility, which is situated in an area of sea called Frohavet off the coast of Frøya.
‘Over the 15 months the fish were in production, we did not need to apply a single delousing treatment.
‘The fish had an excellent rate of growth, and their quality was uniformly good. Such promising results boost our confidence as we embark on the next phase of our strategy of farming fish in locations further out in the ocean, where salmon can be produced on their own terms.’
The CEO said SalMar’s subsidiary, MariCulture, was awarded eight development licences two months ago for the Smart Fish Farm concept.
‘This is the world’s first fish farm designed to be used in the open ocean. The specially designed deep water fish farm is intended to be positioned in harsh environments in the ocean, where both sea temperatures and ocean currents are optimal for salmon.
‘If SalMar’s offshore fish farming strategy succeeds, vast areas of ocean could be opened up for environment friendly and sustainable aquaculture.
‘In this way, Norway can retain and reinforce its position as the world’s leading producer of Atlantic salmon in a long-term perspective.’
Ervik also expressed fears about the possibility of new taxes and levies being imposed on the industry when an independent committee set up by the Oslo government publishes its findings later this year.
Aquaculture, he warned, was vulnerable to fierce competition and to changes in the economic cycle. In addition, the sector was investing heavily to meet a number of environmental and biological challenges.
Picture: SalMar CEO Olav-Andreas Ervik