SalMar boosts second quarter profit amid high salmon prices

Record high salmon prices and solid operational performance helped Frøya, headquartered in Norway SalMar will report operating profit before interest and tax (EBIT) of NOK 1.048 billion (USD 108.9 million, EUR 108.2 million) in the second quarter of 2022, an increase from 661 million (USD 68.7 million, EUR 68.2 million) in the second quarter of 2021.

SalMar’s Norwegian operations achieved operating EBIT of NOK 952 million (USD 99 million, EUR 98.3 million) for the period, compared to NOK 633 million (USD 65.8 million, EUR 65.3 million) a year earlier.

The company’s EBIT was partially impacted by the settlement of a lawsuit in North America, which cost the company NOK 164 million (USD 16.77 million, EUR 16.73 million). The settlement was related to a class-action lawsuit alleging collusion between Norwegian salmon farms.

SalMar’s second quarter 2022 revenue nearly surpassed NOK 4.17 billion (USD 433.6 million, EUR 430.5 million), surpassing NOK 1 billion (USD 103.9 million, EUR 103.2 million) year -on-year, while the harvest was 32,400 tons (MT) compared to 36,600 tons a year earlier. Operating EBIT per kilogram increased to NOK 32.35 (USD 3.36, EUR 3.34).

“Our consistent and relentless efforts to operate under the salmon’s terms, and with a sustainability mindset in everything we do, have again proven to be a recipe for success,” said Linda L. Aase, CEO of SalMar.

Regionally, Fish Farming Central Norway, the group’s largest business segment, harvested a total of 20,700 tons of salmon in the last quarter – some 300 tons less than in the second quarter of 2021 – and generated an operating profit of almost NOK 2.1 billion EUR (218.2 million, EUR 216.8 million), compared to NOK 1.3 billion (USD 135.1 million, EUR 134.2 million) earlier.

SalMar’s Fish Farming Northern Norway division harvested 8,700 tons of salmon in the last quarter, which was 4,600 tons less than in the second quarter of 2021. million, EUR 94.6 million). the divisions Fish Farming Central Norway and Fish Farming Northern Norway are expected to harvest 117,000 tons and 58,000 tons respectively in 2022.

SalMar’s Icelandic salmon harvested 3,000 tons of salmon in the second quarter of 2022, compared to 2,300 tons a year earlier. Operating income was NOK 349 million (USD 36.2 million, EUR 36 million), an increase from NOK 182 million (USD 18.9 million, EUR 18.8 million). It achieved an operating EBIT of NOK 135 million (USD 14 million, EUR 13.9 million), more than four times higher than in the second quarter of 2021. Icelandic salmon is expected to harvest 16,000 tons by 2022.

SalMar’s joint venture, Norskott Havbruk (Scottish Sea Farms), harvested 9,500 tons of salmon in the quarter, compared to 11,400 tons in the second quarter of 2021.

“Our financial results were of course also supported by the high salmon prices in the market, although this happy market situation is weakening the financial results in Sales and Industry due to profitability on contracts,” said Aase.

SalMar’s sales and industry segment, which sells all the fish the group harvests in Norway, generated higher sales of NOK 3.9 billion (USD 404.8 million, EUR 402.2 million) in the last quarter. The unit’s operating EBIT represented a loss of NOK 781 million (USD 81.1 million, EUR 80.6 million), compared to a loss of NOK 136 million USD (14.1 million, EUR 14 million) in the second quarter from 2021. prices that reduce the profitability of contracts.

The group’s newest segment, SalMar Aker Ocean, posted a loss on its operating EBIT of NOK 39 million (USD 4 million, EUR 3.9 million) in the quarter, although it reported that an upgrade of the Ocean Farm 1 design going according to plan. The unit is currently in Aker Verdal undergoing maintenance upgrades and the next production cycle is expected to begin in the spring of 2023.

In total, SalMar generated gross operating income of almost NOK 8.9 billion (USD 924.2 million, EUR 918.4 million) in the first six months of 2022, compared to NOK 6.4 billion (USD 664.8 million, 660.4 million) in the first half of 2021. Excluding Norskott Havbruk, the group harvested 77,400 tons in the first six months of this year. In the same period last year, it harvested 73,500 tons.

The price of salmon for H1 2022 averaged NOK 92.92 (USD 9.65, EUR 9.59) per kilogram, compared to NOK 58.07 (USD 6.03, EUR 5.99) per kilogram in H1 2021.

SalMar’s operating EBIT for the first six months of this year increased from NOK 1.3 billion (USD 135.1 million, EUR 134.2 million) in the first half of 2021 from NOK 2.1 billion (EUR 218.2 million, EUR 216.7 million). EBIT per kilogram of NOK 27.71 (USD 2.88, EUR 2.86), compared to NOK 17.54 (USD 1.82, EUR 1.81) in H1 2021.

Photo courtesy of SalMar

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