Problems with smolt quality have continued to dog the company despite ongoing investment.
Faroese salmon farming giant Bakkafrost has released its financial results for the third quarter of 2023 (Q3 2023). In Q3 2023, the group achieved a total operational EBIT of DKK 269 million ($39 million) compared to DKK 325 million ($47 million) in the same period the previous year, a 17 percent decrease.
The profit for Q3 2023 amounted to DKK 219 million ($31 million).
The operating revenue for Q3 2023 reached DKK 1,859 million ($260 million), slightly lower than the DKK 1,867 million recorded in Q3 2022. For the first nine months of 2023, the operating revenue totaled DKK 5,579 million ($781 million). The group’s operational EBIT for the first nine months of 2023 was DKK 1,188 million ($166 million).
Commenting on the quarter, CEO Regin Jacobsen was pragmatic.
“Growth rates have been surprisingly low, mainly in fish coming from one specific batch of smolt subjected to poor water quality in the hatchery in August 2021, which was caused by start-up issues,” said Jacobsen.
This issue underline the importance of having consistent high-quality smolt, according to Jacobsen, who used the presentation to announce the construction of a new large hatchery in Skálavík, in the Faroe Islands.
“Maintaining a consistent smolt quality and size is one of the main priorities, as we now increase the large-smolt production with the completed expansions at the Norðtoftir, Glyvradal and Viðareiði hatcheries in the Faroes and Applecross well under way in Scotland.”
Farming Faroe Islands Segment:
The company reported all-time low sea lice levels in the Faroe Islands through new freshwater treatment capabilities. However, lower growth rates were observed in Q3 2023 due to issues with a specific batch of smolt related to poor water quality in the hatchery in August 2021, according to the company.
To address these challenges, Bakkafrost plans to harvest around 16,600 tons gutted weight in Q4 2023, with some previously planned harvest volume moved to Q1 2024. The focus is on producing large, high-quality smolt to mitigate risks and improve capacity utilization.
Expansion of hatcheries in the Faroe Islands and the construction of a new large hatchery in Skálavík will enhance smolt production capacity.
- Operating revenue in Q3 2023: DKK 937 million (approximately $131.18 million) – a 9% decrease from Q3 2022.
- Operational EBIT per kg in Q3 2023: 6.47 DKK ($0.91) – a 60% reduction.
- Total volumes harvested in Q3 2023: 16,740 tgw, with only a 1% change in volume.
- Harvested volumes for the first nine months of 2023: 36,403 tgw.
Farming Scotland Segment:
Strategic adjustments have been made for the Scottish farming operation to address biological risks, with a particular emphasis on the use of large, high-quality smolt.
- Operating revenue in Q3 2023: DKK 212 million (approximately $29.68 million) – a 50 percent decrease from Q3 2022.
- Operational EBIT per kilogram (kg) in Q3 2023: -68.70 DKK (-$9.60) – a 209 percent reduction.
- Total volumes harvested in Q3 2023: 4,100 tons gutted weight (tgw), marking a 49 percent decrease.
- Harvested volumes for the first nine months of 2023: 19,536 tgw.
