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Record Prices Led to Record Results for SalMar

23 May 2014

NORWAY - Record-high prices in the first quarter gave the strongest operational operating SalMar ever. Biological challenges this quarter affected the results, but ongoing processes and effects and trends in the underlying business is positive. Operationally operating profit totaled 485 million during the period, an increase of 137 million from the previous quarter, and up a whopping 250 million from the same period last year.

"The result follows from the high prices, but we also see a tendency towards improved operation and development of the underlying costs is positive for each of the segments. At the same time we still have the biological situation as challenging. Expected increased lusepress and resistance challenges will affect growth and harvest plans in the coming quarters with the subsequent cost-increasing effects," said CEO Leif SalMar Nordhammer.

Average price of salmon in the quarter rose 32 per cent from the corresponding period last year and SalMars total operating income totaled 1.6 billion, up about 350 million from the first quarter of 2013. Overall slaughtered group around 27,800 tonnes of salmon during the period (23,200) so overall operational EBIT per kg in the period ended at NOK 17.45 (NOK 10.14).

All breeding segments deliver satisfactory results, the variation between the regions is still great. Operations in the region Central Norway and Rauma was marked by challenges related to logistics and biology and EBIT per kilo ended respectively NOK 19.35 and NOK 15.68 per kilo for the two business areas, while the Northern Region Norway delivered record results in NOK 21.05 per kilo.

In the business area, sales and processing has the ability to set PD-fish in holding pens helped improve production efficiency, but lower harvest volumes than normal resulting in reduced capacity utilisation. In addition, the results for the segment were negatively affected by the Group's fixed-price contracts, which in the period accounted for 35 per cent of the total harvest volume. Off a turnover of just under 1.4 billion in the period and got the business area's operating loss of 28 million. Contract coverage for the upcoming quarter is expected to be approximately 40 per cent.

Average weight of biomass in 2013 our generation is lower than the corresponding period last year. This will affect the harvest volume in the coming quarter is expected to be slightly higher than in the first quarter.

Based on estimates of standing biomass at the end of the period it is expected a growth in the global supply of Atlantic salmon of around seven per cent in 2014. SalMar experiencing strong demand in all of its core markets, and expects a strong salmon market also in 2014.

SalMar keeps its guidance unchanged and still expect to harvest 133,000 tonnes in Norway in 2014. Norskott In Aquaculture (Scottish Seafarm) expected a volume of 12,500 tonnes in 2014 (SalMars 50 per cent share of 25,000 tonnes guide).

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