SalMar posts €1.7 per kilo operational EBIT in Q1: “Food will never go out of fashion”

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Steel results from SalMar.

Expectations were high, as is customary for SalMar. But the operating profit presented on Wednesday morning is 23 per-cent stronger than the estimates from the investment banks that cover the company.

SalMar had an operating profit (EBIT) of EUR 62 million in the first quarter. This is an increase of 48 per-cent compared to the previous quarter. The harvested volume for the quarter ended at 36,900 tonnes, resulting in an operational EBIT per kilogram of EUR 1.7 in the first quarter.

Solid
“Towards the end of the first quarter, the price of salmon rose steadily compared with the levels seen in the autumn of 2020 and at the start of this year. Together with a strong operational performance from our employers along the entire value chain, this enabled SalMar to announce yet another good result, with margins up on the previous quarter,” said Gustav Witzøe said in a stock exchange announcement.

The segments Fish Farming Central Norway and Fish Farming Northern Norway continue “the stable positive trend”, and posted an operational EBIT of EUR 38.4 million and EUR 19.4 million, respectively. Fish transferred to sea farms in the autumn of 2019 accounted for 70 per-cent of the volume harvested by Fish Farming Central Norway, and 100 per-cent of the volume harvested by Fish Farming Northern Norway during the period.

In the second quarter, Fish Farming Northern Norway expects costs at harvest to be slightly lower than in the first quarter, while Fish Farming Central Norway expects costs to remain at the same level. Both segments expect to harvest the same volume in the second quarter as in the first.

The Sales and Industry segment “delivers a strong result, driven by good capacity utilisation, a strong operational performance and positive contributions from fixed-price contracts,” wrote SalMar. The segment’s operational EBIT came to EUR 11.7 million in the first quarter.

Icelandic Salmon delivers a positive operating profit of EUR 0.4 million, driven by improved operational and biological performance and higher salmon prices compared to the previous quarters.

Green financing
SalMar maintains the expectation of a harvest volume for 2021 of 163,000 tonnes and 14,000 tonnes for Iceland.

So far this year, SalMar has secured a total of EUR 746 million in green financing in the form of EUR 400 million in sustainability linked drawing facilities and a successful placement of an unsecured senior green bond of EUR 350 million.

“The new credit facilities strengthen our financial capacity and flexibility, and give us the chance to exploit strategic opportunities for further sustainable growth,” said CFO & COO Trine Sæther Romuld.

Well placed
After a year of pandemic and a market characterised by global uncertainty, mass vaccination in large parts of the world has contributed to brighter prospects in the salmon industry. Salmon prices are now back to the level before the pandemic broke out.

“We have always had unwavering confidence in the salmon farming industry and continue to invest in new smolt facilities and processing plants, as well as costal and offshore farming. SalMar is well placed to continue growing sustainably, not for growth’s sake alone, but because salmon is a sustainable marine protein which is needed by Norway and the rest of the world. SalMar has been producing farmed salmon for 30 years, and intends to carry on doing so indefinitely. Food will never go out of fashion,” said SalMar’s CEO Gustav Witzøe.