Scottish Sea Farms helps SalMar to profit in Q1

Scottish Sea Farms (Picture: SSF)

SalMar today became the latest fish farming company to report increased first quarter operating profits on the back of soaring salmon prices.

The salmon giant, which is part owner of Scottish Sea Farms (SSF), posted an operational EBIT of NOK 1.26 billion (£105m), almost double the NOK 627m (£52m) figure for the same period last year.

SSF, also known as Norskott Havbruk, reported an increased harvest of 7,800 tonnes – up from 4,900 tonnes on Q4 2021 and up from 5,900 tonnes on the same period last year. The company took over Grieg’s Shetland business at the end of last year.

SalMar’s share of SSF profits after tax totalled NOK 96m (£8m), just over double the NOK 46m (£3.86m) figure for Q1 last year.

Linda Litlekalsøy Aase, who took over as SalMar’s new CEO this week, said: “Our employees have again delivered impressive performance in the form of first-class product quality and very good operational and financial results.

“Central Norway, and especially Northern Norway, reported strong biological and operational performance and the activities in Iceland showed solid results as a result of good price achievement and a stable cost level

She added: “Record high salmon prices have contributed to the strong results, but the current market situation weakens the financial result in the Sales and industry segment due to the price level of contracts. The underlying operations in the quarter in isolation are better than previous quarters.”

As part of its growth strategy, SalMar launched a voluntary offer in the first quarter to buy all outstanding shares in NTS ASA.

The acceptance deadline for the offer expired at the end of April, when acceptance was received for a total of 52.7 per cent of the shares in NTS.

SalMar said it was satisfied with the support of acceptances, which means that NTS will become a subsidiary of SalMar when implementing the offer.

“Provided that the offer is completed, SalMar will fulfil the offer obligation with a cash offer for the remaining shares in NTS in line with applicable law,” the company added.

SalMar said it was optimistic about the future of the aquaculture industry, adding that the total supply of salmon in 2022 is predicted to be at the same level as last year.

It expects a corresponding cost level, lower harvest volume and a contract share of around 60% in the second quarter of 2022. The contract share in the second quarter is higher than normal due to lower harvest volumes.

Harvest volume forecasts remain unchanged. The company expects 175,000 tonnes from Norway, 46,000 tonnes from Scotland and 16,000 tonnes from Iceland.