Biological issues at Scottish sites drag down Bakkafrost results

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On Tuesday morning, Bakkafrost announced an operational EBIT of DKK 70.5 million (€9.5 million). The result was far below expectations. An operating profit of DKK 296 million (€39.7 million) had been predicted by analysts covering the company.

The company harvested 21,900 tonnes of salmon in the quarter, of which 14,900 tonnes were in the Faroe Islands and 6,900 tonnes were in Scotland.

The problems were particularly great in Scotland, where the company lost DKK 81.3 million (€11 million) on operations.

“The results in this quarter have been weakened by several factors in Scotland and the Faroe Islands. In the Faroe Islands, we made a conscious decision to pre-harvest the A72 Haraldsund site in order to recover synchronized production plans with the neighboring site A-72 Viðareiði. This resulted in higher costs, lower slaughter weights and price achievements in this quarter. This is a one-off event and in the future we will benefit from having the sites synchronised with better control over biological risk and improved operational efficiency,” Bakkafrost CEO Regin Jacobsen explained in a stock exchange announcement.

The result has also been affected by delays in installing de-licing equipment on the former supply boat “Martin”, which is the company’s most important de-licing unit in the Faroe Islands. The delays are due to Covid infection and have resulted in loss of time in important preventive de-licing work. This in turn has resulted in increased mortality in the quarter.

In Scotland, the company has had significant biological problems with gill disease at several sites. Towards the end of the quarter, the company also struggled with a rise in the number of micro-jellyfish, which has resulted in significant mortality.

In September, the company’s new farming supply ship “Bakkanes” was put into operation in Scotland. This is expected to reduce biological risk and provide increased treatment capacity for gill health for the fish.

In 2022, the company will have a significantly larger large smolt capacity, which the management hopes will result in major positive changes for operations.

In the last quarter of 2021, Bakkafrost expects negative growth, by four percent, in the supply of salmon globally.