Bakkafrost announces massive investment plan after solid Q2 report

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High ambitions for the Faroese salmon farmer.

The Bakkafrost Group delivered a total operating EBIT of DKK 407.9 (€54.7) million in Q2 2018. The total volumes harvested in Q2 2018 were 12,902 tonnes gutted weight.

Bakkafrost has reduced its guidance for harvesting volumes for 2018 by 2,000 tonnes gutted weight, from 51,000 tonnes to 49,000 tonnes gutted weight, according to Bakkafrost’s Q2 report.

Commenting on the result, CEO Regin Jacobsen said: “The salmon price was good in the second quarter, and although the price fell throughout the quarter, the result for Bakkafrost was good for the second quarter.”

“Bakkafrost has in recent years made large investments to develop the company and now we are pleased to announce a new investment plan for the period from 2018 to 2022. Bakkafrost expects to make investments of around DKK 3 billion (€402 million) during this period. The salmon farming business has developed dramatically since it started in the Faroe Islands. We foresee great opportunities for development in the future and to be able to transfer these opportunities into realities, large investments are needed,” he added.

The planned investment program from 2018 to 2022 will amount to DKK 3 billion over 5 years and will reinforce Bakkafrost’s integrated business model. The aim of the investment program is to minimize the biological risk, increase efficiency and create sustainable organic growth. Maintenance capex is included in the investment program. Over the next five years Bakkafrost will use around DKK 425 million in the fishmeal, oil and feed business to increase feed capacity and feed line capabilities. Investment will also be made to increase the fish oil capacity to support marine index. Bakkafrost has taken the full responsibility of the Faroese broodstock program and obtains the genome rights in 2021. In the new investment program, Bakkafrost expects to invest around DKK 200 million in a new site to run the broodstock program in a totally closed land-based system. Investment in the farming operation will be around DKK 1.3 billion over the next five years. Investments in new sites in Suðuroy will together with the large smolt strategy add a further capacity of 10 thousand tonnes.

Bakkafrost will continue the existing smolt projects and launch new projects to support the large smolt strategy for the new farming areas. Construction of a new hatchery in Suðuroy for large smolt production is expected to commence early 2019. Bakkafrost’s investments in smolt operation in the next five years will be around DKK 1 billion.