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Record Profits for SalMar in Q2 2013

Salmonids Economics +2 more

NORWAY - SalMar achieved a record high profit before tax of NOK 844 million in the second quarter 2013. The operational EBIT was NOK 316 million in the quarter, an increase from NOK 235 million from the previous quarter, and from an operational EBIT of NOK 66 million the second quarter last year.

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Operating profit per kg came to NOK 13.84 in the second quarter, compared with NOK 10.14 per kg in the first quarter and NOK 3.28 in the second quarter last year.

The fact that around 25 per cent of the volume was sold under fixed-price contracts had a slight negative effect on the results achieved in the period. The Group's fish farming segments achieved an average operating profit of NOK 16.78 per kg. This strong result comes after a period of consistently high prices.

"All our fish farming segments performed well during the quarter, though there is still room for improvement," said SalMar's CEO, Yngve Myhre.

The Group generated gross operating revenues of NOK 1.43 billion during the quarter, up 70 per cent on the same quarter last year. A total of 22,800 tonnes of fish were harvested during the quarter.

During the period SalMar increased its shareholding in Villa Organic AS to 50.42 per cent. The company has fish farming operations in Finnmark, and controls a total of 16 production licences. The company will be consolidated into SalMar's accounts and presented as a separate segment with effect from the third quarter 2013. The company expects to harvest 12,000 tonnes in 2013.

Furthermore, SalMar has sold 15 per cent of the shares in P/f Bakkafrost, reducing its shareholding in the Faroe Island company to 14.9 per cent. The sale of shares resulted in a recognised gain of a NOK 170.1 million.

SalMar considers the outlook for the rest of the year to be good. Output of Atlantic salmon is expected to fall by two per cent in the third quarter, and increase by four per cent in the fourth quarter this year, compared with the corresponding periods in 2012. Fish Pool Forward prices as at the middle of August point to an average salmon price of NOK 39.59 and NOK 34.27 per kg in the third and fourth quarters 2013 respectively.

Sea temperatures have been significantly lower in the first half of 2013 than in the same period in 2012. The temperature rose slightly above the 2012 level this summer. Combined with low salmon lice levels in the sea pens, this provides the foundation for good, cost-effective operations in the time ahead. SalMar is maintaining its overall harvesting forecast for 2013 at 116,000 tonnes, up 13 per cent compared with 2012.