Norwegian salmon exporters profitability under severe pressure

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More than half of them had operating margins of less than one per-cent last year.

It’s nearing the end of September, and still, not all of the country’s exporters of salmon and trout have delivered their annual accounts. That itself is a sign of weakness. SalmonBusiness has studied the financial statements of 23 companies operating in the export segment. And it doesn’t make an uplifting read.

12 of the companies in the sample had less than one per-cent operating margin. Five of them lost money last year.

12 of the companies achieved a weaker operating margin in 2019 than in 2018.

Norwegian salmon exporters revenue

Under pressure
In total, this sample of exporters sold fish for EUR 4.2 billion last year. In total, this was an operating profit of EUR 67 million or an operating margin of 1.6 per-cent.

However, when compared to Lerøy Seafood’s (the sales company, a subsidiary of Lerøy Seafood Group, was called Hallvard Lerøy, but was renamed to Lerøy Seafood) EUR 38 million operating profit, the overall operating result is not quite as impressive.

And it shows above all that the smaller fish exporters are under pressure. That’s how it’s been for a long time. Several companies have also had to shut down their operations after a margin squeeze that has been going on for ten years now.

Hard work
But it isn’t all bad.

Among those who increased profit and operating margin from 2018 to 2019 was the relatively new company Star Seafood.

“Considering that it is the first full year of operations, we are satisfied. There is a lot of hard work behind and then it is especially nice that it gives results,” Star Seafood CEO Hildegunn Fure Osmundsvåg told SalmonBusiness when the result was publicly known.

The best profitability last year was the exporter Orion Seafood, with an operating margin of 8.9 per-cent.

Negative
Then followed two Bergen exporters, namely Ice Seafood and Lerøy Seafood. The latter is by far the largest in the sample, accounting for 35 per-cent of total fish sales. Size is clearly no disadvantage for the export company.

At the bottom of the list, with negative operating results last year, were the companies Inter Sea, Nordøy Sea, Prestfjord Seafood, Salmosea and Global Salmon.