42 per-cent more fish harvested, high production costs and low prices.
In a report on the Oslo Stock Exchange, Norway Royal Salmon (NRS) posted an operational Q3 EBIT of EUR 3.1 million and an EBIT per kg of EUR 0.38. Corresponding figures for the same quarter last year were EUR 11.7 million and EUR 1.76. This corresponds to a 73 per-cent drop in EBIT.
“The market price of salmon has, as normal, been seasonally low in the quarter but is also impacted by the Covid-19 pandemic. In the quarter NRS finished harvest of a generation that has had high production costs. Our margins in this quarter are therefore affected by this. We have had good growth throughout the quarter, and by starting to harvest a new generation we expect lower production costs in the next quarter,” said CEO Charles Høstlund.
NRS said it had EUR 100 milliom in unutilized credit facilities at the end of Q3. After the end of the quarter, NRS was offered EUR 71 million in an increased loan facility with a sustainability term loan, which will further increase the group’s financial headroom.
Net cash flow from operations was positive by EUR 24 million in the quarter. Payments for acquisition of MAB through the governmental MAB-auction and payments for the growth investments in Arctic Offshore Farming and the new smolt facility have resulted in an increase in net interest-bearing by EUR 327 to EUR 85 in the quarter. The equity at the end of the quarter is EUR 30 million, which equates to an equity ratio of 58 per-cent.
NRS harvested 10 058 tonnes of fish in the quarter, which is 42 per-cent higher than in the same quarter last year. For 2020, the harvest volume is expected to be 32 500 tonnes and for 2021 the harvest volume is estimated to 40 000 tonnes, which is an increase of 23 per-cent compared with 2020. Estimated smolt put to sea for 2020 is 10 million smolts. Sold volume from the sales business in the quarter was 27 110 tonnes salmon, which is 10 per-cent higher than in the corresponding quarter last year.
“NRS has high expectations of our aquaculture investment in Iceland, through Arctic Fish which we own 50 per-cent. We want to take this company a step further and have therefore engaged financial advisers to explore a potential listing of Arctic Fish on Merkur Market. A possible result of the process is that NRS will surpass majority ownership in Arctic Fish after the transaction,” said Charles Høstlund.