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SalMar Q3 2013 Profits Rise in a Strong Salmon Market

15 November 2013

NORWAY - SalMar's profits continued to rise in the third quarter, with Operational EBIT ending the period at NOK 360 million. This is an increase of almost NOK 250 million compared with the corresponding period last year.

The rise derives largely from higher salmon prices. Biological challenges and the fact that 25 per cent of the volume was sold under fixed-price contracts had a negative impact on the Group's results.

"We are very pleased to have achieved a solid improvement in our results. The Group's results are satisfying so far in 2013 and SalMar is in route to deliver its best year in the company's history. At the same time we readily acknowledge that the results are largely attributable to a strong market. During the third quarter we have experienced biological challenges associated with PD in Central Norway, while our handling of salmon lice has been more extensive in certain regions. We take these challenges seriously, and are following them up closely to optimise our operations," said SalMar's CEO Yngve Myhre.

Gross operating revenues rose to almost NOK 1.7 billion in the period, up NOK 468 million from the third quarter 2012. The Group harvested around 34,800 tonnes of fish during the period (35,400), which resulted in an Operational EBIT of NOK 10.36 per kg (NOK 3.14).

Operational developments within the fish farming segment varied during the period. The biological situation in SalMar Northern Norway is good, while activities in SalMar Central Norway and Rauma have been affected by PD-related challenges.

Productivity within the Sales and Processing segment was high during the quarter, despite a higher proportion of PD-fish being harvested. However, the segment's results were negatively affected by the Group's fixed-price contracts.

The latest biomass prognosis gives expectations of limited growth in the global release of smolt. Combined with certain biological challenges in the industry, this indicates continued low growth in supply in 2014.

SalMar expects the market to remain relatively tight with good salmon prices in the time ahead. A portion of the previously forecasted harvesting volume for 2013 is being deferred to 2014 in anticipation of higher salmon prices. For Norway SalMar expects to harvest 114,000 tonnes in 2013 and 133,000 tonnes in 2014. The figures for 2014 include SalMar's expected share of recently acquired Villa Organic's volume in Finmark. Norskott Havbruk (Scottish Seafarms) expects a stable volume of 26,000 tonnes in both 2013 and 2014.

TheFishSite News Desk

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