NRS’ biomass is growing fast in troubled market

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Norway Royal Salmon (NRS) reports an operational EBIT of NOK 120 million (EUR 11.3 million) for the second quarter 2020 and EBIT per kg of NOK 17.06 (EUR 1.61). 

“We have had a quarter characterized by large fluctuations in the market price of salmon, and thus achieved a significantly lower salmon price than at the same time last year. This is largely due to the Covid-19 pandemic. It is gratifying to see that the production cost has a positive development from the previous quarter, where we have achieved good biological and financial results at some sites during the quarter. However, we still see that we have too large fluctuations in performance, which means that our focus going ahead will be on strict cost control and better utilisation of our production capacity,” said CEO Charles Høstlund.

Net cash flow from operations was positive by NOK 183 (EUR 17.3 million) in the quarter. Payment of dividend and purchase of treasury shares, as well as payments for the growth investments in Arctic Offshore Farming and the new smolt facility, have resulted in net interest-bearing debt increasing to NOK 618 million (EUR 58.3 million) in the quarter.

NRS harvested 7,894 tonnes gutted weight in the quarter, which is 59 per-cent higher than in the same quarter last year. Estimated harvest volume for 2020 is 35,000 tonnes, an increase of 28 per-cent compared with the volume harvested in 2019. Sold volume from the sales business in the quarter was 20,650 tonnes salmon, which is 18 per-cent higher than in the corresponding quarter last year.

“After the end of the quarter, NRS purchased additional production capacity in Troms and Finnmark through the authorities’ traffic light system for growth. The purchase once again highlights the company’s strategic commitment to further development of the company in Northern Norway, both through existing production capacity and new investment projects. NRS shall continue with sustainable growth and the Group has 24 per-cent higher biomass in the sea at the end of the quarter compared to the same quarter last year,” said Charles Høstlund.

NRS owns 36.085 tonnes MAB (maximum allowed biomass) located in Troms and Finnmark, Northern Norway. In addition, the group has minority interest in three associated Norwegian fish farming companies which together own 11 fish farming licenses, as well as Arctic Fish on Iceland that has licenses for 11,800 tonnes in MAB.