Strong biological performance compensates for heavy price falls

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Bakkafrost delivered an operating profit of EUR 34.4 million in the third quarter of the year.

The harvest volume was 12,938 tonnes of salmon, gutted weight.

“The salmon spot prices decreased significantly in Q3 2019, compared to the previous quarter. The price decrease had a negative effect on the operational EBIT in the farming segment, while it had a positive effect on the operational EBIT in the VAP segment,” Bakkafrost wrote in a stock exchange announcement Tuesday morning.

CEO Regin Jacobsen said he was pleased with the result.

“Despite 10% lower salmon spot prices during the third quarter for 2019, compared to the same quarter last year, Bakkafrost has delivered strong operational results this quarter. The average size of the harvested salmon has been exceptionally high, which has put us in a very good position to withstand the difficult market situation. The biological performance has been very good with high growth rates for the salmon. Sea lice and mortality rates have been amongst the lowest for many years,” he said.

“This is a result of committed and skilled employees and a strong effort on the continuous improvement of the biology and the welfare of the salmon,” Jacobsen added.

However, the biggest event of the quarter was the acquisition of the Scottish Salmon Company (SSC). Fully integrated SSC controls 60 fish farms on the Scottish West Coast and the Hebrides. As of November 5, Bakkafrost controls 80.77 per-cent of the shares in SSC.

Bakkafrost estimates for the 2019 global supply of Atlantic salmon an increase of around 7%, compared to 2018. The supply of Atlantic salmon will be tight in 2020, it wrote, as global supply in 2020 and is estimated to increase around 4%, compared to estimated supply in 2019.

The company also expects a harvest volume of 54,500 tonnes this year, increasing to 57,000 tonnes next year – excluding the harvest volumes from SSC.