Bakkafrosts weathers the storm with escapes, lower harvest volumes and COVID 19

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“Overall we are satisfied with the results from this challenging quarter”.

In a statement on the Oslo Stock Exchange, the Faroese salmon farmer Bakkafrost has posted its latest Q1 results.

The salmon farmer wrote that it faced some challenges this quarter. This included an unusually stormy January, which “reduced the fishery of species, used as raw material by Havsbr├║n, hence reducing production”. Furthermore, a severe storm at the end of February caused a loss of around 1.2 million fish and then the outbreak of the Covid-19 pandemic hit.

Q1 Operational EBIT was EUR 33 million, down from EUR 40 million the year before. Revenues were EUR 168 million, up from EUR 129 million.

The total volumes harvested in Q1 2020 were 17,935 tonnes gutted weight, whereof 10,667 tonnes were harvested in the Faroe Islands (13,707 tgw) and 7,268 tonnes in Scotland. In total, 3.3 million smolts were transferred during Q1 2020, whereof 2.3 million (1.7 million) were transferred in FO and 1.0 million were transferred in SCT.

Challenging quarter
Bakkafrost wrote that “biological development is also good with strong growth in both the Faroe Islands and Scotland”.

“Overall we are satisfied with the results from this challenging quarter,” said CEO Regin Jacobsen. “In times like these, we see the strength in our integrated value chain and in particular having significant production capacity and flexibility in our VAP segment. Swiftly, we have been able to shift volumes from the spot-oriented market towards the VAP segment for the retail market and hereby maintaining high production,” he added.

“We are pleased that the integration of SSC into Bakkafrost is on track and of already seeing a positive development in the operation in Scotland; the tangible results, however, are not expected to materialize until late this year. Our staff in Scotland and the Faroe Islands are highly motivated and their cooperation is very good,” said Jacobsen.

Pandemic
On Covid-19, the salmon farmer explained that it was impacted by the significant market disruption caused by the pandemic, especially towards the end of the quarter.

This disrupted the salmon market resulting in a drastic drop in the salmon spot price and imposing logistical problems with air transport. Furthermore, it added that “over a few weeks, the demand for salmon has changed in favour of products for the retail segment, but at great harm to the fresh-oriented HORECA segment”.

Bakkafrost added that it “will be interesting to see if the huge number of new consumers, buying salmon from the supermarkets, will be a part of increased demand for salmon, when the HORECA segment re-opens during the next coming weeks and months.”

Looking ahead, Bakkafrost expects to harvest 50,000 tonnes in the Faroe Islands and 39,000 tonnes in Scotland in 2020.