Bakkafrost to invest EUR 241 million in operations after posting record high results

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Faroese salmon farmer to supersize its integrated business model by a quarter of a billion euros to produce 100,000 tonnes a year.

In a statement on the Olso Stock Exchange, Bakkafrost posted its Q4 results – boosted by the fact it acquired the majority of the Scottish Salmon Company last October (now consolidated into accounts) as well as high volumes and record-high revenue and operational results for the company.

Operating revenue was EUR 214 million – a significant increase on the period before of just EUR 30 million. Operating EBIT was EUR 55.5 million in Q4.

Harvested volumes for the Group were 25.9 thousand tonnes (gutted weight) and 17.9 thousand tonnes were harvested in the Faroe Islands and 7.9 thousand tonnes in Scotland.

The farming segment made an operational EBIT of EUR 45.2 million in the Faroe Islands and EUR 2.4 million in Scotland. “Achieved prices and volumes in the Faroese operations increased and thus had a positive effect on the operational EBIT,” it wrote.

Commenting on the result, CEO Regin Jacobsen said the SSC acquisition is yielding results but urged patience.

“We are satisfied with the result for 2019. The beginning of the fourth quarter was characterized by a high supply of small fish, which caused disruption in the market. At the end of the quarter, supply pressure shifted to demand-driven growth.

“Our harvested volumes in the Faroe Islands were the highest ever for a fourth-quarter – with record big fish – the revenue and operational result was also record high for a fourth quarter. The biological performance has been very good. The new Strond Hatchery is up-scaling production and contributes from now on significantly to our operation. We are pleased about the VAP segment’s good results for the quarter.

“2019 has been an eventful year for Bakkafrost. We have made a giant leap into new geography by the acquisition of The Scottish Salmon Company. This acquisition has increased the scale of our operation significantly and brought us new possibilities to exploit for many years ahead. We are very excited about this but do realize that it will take time before we will really see the results of the investments we will do in the Scottish operation. We are convinced that this is possible, however, with the committed people we have in the organization in Scotland and in the Faroe Islands.”

Looking ahead the salmon farmer’s investment programme for the period from 2020 to 2022- excluding investments in The Scottish Salmon Company – will amount to around EUR 241 million including maintenance CapEx and “will reinforce Bakkafrost’s integrated business model and ensure a capacity across the value chain to be able to produce 100,000 tonnes gutted weight of salmon in the Faroe Islands”.