SalMar posts higher Q4 profits, but Scotland disappoints

Salmon giant SalMar reported last quarter operating profit of NOK 890m (£74m), more than double the fourth quarter 2020 figure of NOK 414m (£34.5m). sterling).

The farms in northern and central Norway and Arnarlax, its Icelandic salmon farming subsidiary, have achieved excellent results.

But the performance of Scottish Sea Farms (also known as Norskott Havbruk), in which SalMar owns half the shares, was disappointing.

SalMar said the SSF Q4 crop increased from 6,400 tonnes in 2020 to 4,900 tonnes this time. However, the harvest for the whole year is well up at 32,400 tonnes against 24,000 tonnes for 2020.

Norskott Havbruk generated gross operating income of NOK 344 million (£29 million) in the last three months, compared to NOK 773 million (£64 million) for the July-September period of the third quarter and NOK 427 million (£35.5 million) in the fourth quarter of 2020. SalMar said the decline is due to lower harvest volumes.

The EBIT per kg eviscerated weight corresponds to a loss of NOK -5.84 against a forecast of NOK 11.87 12 months earlier.

There are two main reasons for the decline. SalMar said the costs of buying Grieg Seafood’s Shetland business have been factored into the figures and amount to NOK 6.7 per kg.

There were also biological challenges, particularly those related to gill health, which negatively impacted the outcome of the final period. It also led to the harvesting of fish with a lower average weight, which affected both the cost and the price obtained.

SalMar’s fourth quarter share of Norskott Havbruk’s net profit was a loss of NOK -11 million (£900,000).

On the upside, the company said it expects a significant increase in volume harvested this year by Norskott Havbruk/SSF following the acquisition of Shetland. SSF expects to harvest 46,000 tonnes in 2022.

Regarding the group’s overall operations, SalMar CEO Gustav Witzøe said: “Our team achieved impressive results in many important areas, resulting in a record harvest volume in the fourth quarter and on the whole year thanks to very good utilization of increased production capacity.

Fourth quarter results were weakened by higher costs associated with managing biological challenges and weak price realization.

There is still room for improvement throughout the value chain, added Witzøe.

SalMar is set to take over the NTS Group, which includes Norway Royal Salmon and SalmoNor, which will significantly increase revenues and harvests this year.

Witzøe also said: “We are planning significant investments in 2022 to further strengthen our sustainable growth platform. We plan to invest NOK 2.1 billion (£173 million) across our value chain across all our regions and segments in 2022, where the bulk is investments that will give us capacity and increased flexibility for additional volume growth.