Salmon processing. (Photo Credit: SalMar)

SalMar achieves profit rise despite biological issues

SalMar obtained strong operational EBIT in the first quarter 2014 as a result of record high salmon prices and despite the biological challenges the company has had to face.

The firm made an operational EBIT of NOK 485 million (EUR 59.5 million) during the period, a rise of NOK 137 million (EUR 16.8 million) from the previous quarter and a substantial NOK 250 million (EUR 30.6 million) more than in the corresponding period last year.

“The result is due to high salmon prices, but we are also seeing indications of improved operating performance and reductions in underlying costs from some of our farming segments," pointed out SalMar's CEO Leif Inge Nordhammer.

And he added: "At the same time, the biological situation remains challenging. The growing intensity of salmon lice infestation and increasing resistance to treatment that we see ahead could affect fish growth rates and harvesting plans in coming quarters, with attendant consequences for costs."

The firm reported an average price of salmon that was 32 per cent higher in the first quarter 2014 than in the same quarter last year.

SalMar's gross operating revenues rose to NOK 1.6 billion (EUR 196 million), up around NOK 350 million (EUR 42.9 million) from the first quarter 2013.

In total the Group harvested some 27,800 tonnes of salmon during the period, a slight increase from 23,200 tonnes in the same period last year.

The firm sources indicated that regional differences remained considerable. While operations at SalMar Central Norway and the Rauma segment were affected by biological and logistical challenges, with EBIT per kg closing the quarter at NOK 19.3 (EUR 2.4) and NOK 15.7 (EUR 2) respectively, SalMar Northern Norway, on the other hand, posted a record EBIT per kg of NOK 21 (EUR 2.6).

The sales and processing segment is now able to keep PD-infected fish in holding pens prior to harvesting, which has improved production efficiency.

However, lower than normal harvesting volumes reduced capacity utilization and the segment's results were also negatively affected by the Group's fixed-price contracts, which accounted for 35 per cent of the total harvested volume during the period.

All in all, SalMar maintains its harvest forecast unchanged: it expects to harvest 133,000 tonnes in Norway in 2014, while Norskott Havbruk (Scottish Seafarms) expects to produce a total of 25,000 tonnes this year, of which half volume corresponds to 50 per cent of SalMar participation. 

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Address:	Industriveien 51,
City:	Kverva
State/ZIP:	(NO-7266)
Country:	Norway
Phone:	+47 7244 7900
Fax:	+47 7244 7901
E-Mail:	Salmar@salmar.no
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