NRS publish lower than expected earnings

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Low price and increased costs.

In a financial update, listed salmon farmer Norway Royal Salmon (NRS) reports that it expects lower results for Q1.

Preliminary operational EBIT per kg for the farming and sales operations is EUR 1.4 and preliminary operational EBIT for the Group is EUR 6.4 million for Q1.

To compare, Q1 2019 operational EBIT EUR 18.2 million and EBIT per kg was EUR 2.6 per kilo.

It wrote that it faced challenges with winter wounds on some of the fish resulting in “quality downgrades on harvested fish and reduced the price achievement, as well as increased production costs”.

In addition, a significant proportion of the fish harvested in the quarter come from an area which is subject to restrictions due to the fish disease ISA, which resulted in higher well boat and harvest costs.

“The challenges of winter sores and harvest from an area subject to restrictions are temporary. The price achievement is also affected by half of the quarterly volume being harvested in March when the price of salmon was at the lowest. Overall, this gives a lower result than expectations for the first quarter of 2020,” it wrote.