March 1, 2012

 

SalMar gets lower revenues in Q4

The SalMar Group generated gross operating revenues of NOK1.07 billion (US$120 billion) in the fourth quarter 2011 against NOK1.15 billion (US$206 million) on-year.

 

SalMar incurred non-recurring costs of NOK50 million (US$9 million), linked to the removal of some 1.5 million salmon in central Norway, where the PD virus was identified in December. Operating profit after non-recurring costs, therefore came to NOK13.3 million (US$2.4 million).

 

The Norwegian Food Safety Authority last month confirmed the presence of the PD virus in a farming site at Finnvika in Tromsø Municipality, holding 2.1 million salmon with an average weight of approximately 300 grams. The production value of the fish is approximately NOK30 million (US$5.1 million) and the yield is planned to be next year.

 

The results posted by SalMar Northern Norway were affected by the sale of 50% of the quarter's volume in October, when spot prices were at their lowest.

 

The results for the Rauma segment were impacted by the PD virus identified early in the lifecycle of the fish harvested in the second half of 2011. Production costs per kilogramme rose by NOK1.00 (US$0.18) - NOK2 (US$0.36).

 

This led to an operating profit per kilogramme of NOK3.73 (US$0.67) for SalMar Central Norway and NOK0.23 (US$0.04) for the Rauma segment, while SalMar Northern Norway made an operating loss per kilogrammeme of NOK2.33 (US$0.42).

 

SalMar owns 50% of Norskott Havbruk AS which generated gross operating revenues of NOK248 million (US$44.5 million) in Q4 and made an operating loss before fair value adjustment of the biomass of NOK6.9 million (US$1.2 million).

 

At the close of the quarter, SalMar owned 24.8% of Faerose fish farmer P/F Bakkafrost, which in Q4 posted an operating profit before fair value adjustment of the biomass of NOK47.8 million (US$8.6 million). SalMar's share came to NOK22.9 million (US$4.1 million).

 

Including its 50% stake in Norskott Havbruk AS, the SalMar Group harvested around 34,960 tonnes in the fourth quarter.

 

In 2012, SalMar expects to harvest some 116,500 tonnes overall.

 

SalMar has also entered into an agreement with Lerøy Seafood Group ASA where SalMar's InnovaMar facility at Frøya will provide harvesting and processing services related to salmon farmed in Lerøy's sea farms in Møre and Trøndelag. The cooperation will start immediately and will provide synergies for both the harvesting and processing activities SalMar runs at the InnovaMar facility.

 

The long-term outlook for the Group and the industry as a whole is positive, although short-term price fluctuations must be expected due to imbalances between supply and demand in the market from time to time, SalMar said.

 

At the end of February 2012, salmon prices rose to levels well above those seen in H2 2011.