EBIT halved because of reduced price achievement and increased production costs.
In a statement on Tuesday, Norway Royal Salmon (NRS) reports a Q1 operational EBIT of EUR 6.7 million for the first quarter 2020 and EBIT per kg of EUR 1.4. Corresponding figures for the same quarter last year were EUR 14.5 million and EUR 2.2.
“Covid-19 had a significant impact on the world in the first quarter and has put us all to the test. Our world is facing some formidable challenges and the need for healthy, environmentally friendly seafood will be important in the future. We are very pleased that none of our employees have been diagnosed with the virus and that Covid-19 has not affected production so far, ” said CEO Charles Høstlund.
“As a result of winter wounds, harvest from a zone with restrictions and the timing of harvest, the quarter was influenced by reduced price achievement and increased production costs. That the Group’s growth initiative on Iceland, Arctic Fish, achieved an operating EBIT of MNOK 16 (EUR 1.4 million) and an operating EBIT per kg of NOK 18.47 (EUR 1.6) in the quarter is very satisfactory,” he added.
Despite the figures, NRS wrote that it has it was in a strong financial position with EUR 164.7 million in unutilised credit facilities and EUR 5.1 million in bank deposits at the end of the first quarter of 2020.
“Payments for the growth investments in Arctic Offshore Farming, the new smolt facility and acquisition of 289 tonnes of MAB have resulted in an increase in net interest-bearing debt during the quarter to MNOK 283 (EUR 25.3 million. The equity at the end of the quarter is MNOK 3 382 (EUR 302.7 million) which equates an equity ratio of 72 per cent,” wrote the salmon farmer.
“In the first quarter, NRS purchased available capacity through the authorities’ traffic light system in Norway and now owns 35 035 tonnes of MAB. NRS shall grow through sustainable growth and the Group has 38 per cent higher biomass in the sea at the end of the quarter compared to the same quarter last year. With our ambitions for sustainable growth, we want to increase our capacity with both existing and extended licenses,” elaborated Høstlund.
NRS harvested 5 409 tonnes gutted weight in the quarter, which is 23 per cent lower than in the same quarter last year. Estimated harvest volume for 2020 is 37 000 tonnes, an increase of 36 per cent compared with the volume harvested in 2019. Sold volume from the sales business in the quarter was 17 900 tonnes salmon, which is 22 per cent lower than in the corresponding quarter last year.