The Norwegian salmon-farming company, Salmar Group has generated record first-quarter profits this year, a whopping 86% increase compared with the same quarter in 2009.

 

The group, which has salmon farms in central and northern Norway as well as a 50% stake in Scottish Sea Farms had operating profits (EBIT before fair value adjustment of the biomass) of NOK152.7 million (US$25.1 million) in the first quarter 2010.

 

All segments (SalMar Central Norway, SalMar Northern Norway and Scottish Sea Farms) achieved strong margins during the quarter. The result is due to a combination of record-high salmon prices in the first quarter and continued satisfactory growth of the fish.

 

The SalMar Group generated gross operating revenue of NOK617.9 million (US$101.6 million) in the first quarter 2010, compared with NOK476.2 million (US$78.3 million) in the corresponding quarter in 2009. Operating profit per kilogramme gutted weight were NOK13.53 (US$2.23) for SalMar Central Norway and NOK11.09 (US$1.82) for SalMar Northern Norway.

 

Commenting on the results CEO Leif Inge Nordhammer said: "The first quarter 2010 was a record first quarter for the SalMar Group. All segments posted good profitability on the back of a strong salmon market and satisfactory development within the biomass. SalMar's strategy for dealing with sea lice has been effective and we have the lice situation well in hand at all our sites.

 

"The salmon market is currently strong, and so far in 2010 both salmon prices and export volumes have been at record levels for the time of year. The global supply of salmon is expected to fall by around 5% in 2010. Combined with a continued strong demand in our most important markets, this should result in salmon prices stabilising at a relatively high level for a long time to come."

 

The company owns 50% of Norskott Havbruk AS, which has fish-farming operations in mainland Scotland, the Orkneys and Shetland. The business generated gross operating revenue of NOK285.4 million (US$46.9 million) in the first quarter 2010 and made an operating profit before fair value adjustment of the biomass of NOK72.6 million (US$11.9 million), up from NOK32.2 million (US$5.3 million) in the corresponding quarter in 2009. The margin per kg gutted weight was NOK8.75 (US$1.44) for the quarter.

 

The SalMar Group harvested around 15,900 tonnes gutted weight in the first quarter 2010, divided between 9,600 tonnes in central Norway, 2,100 tonnes in northern Norway and 4,200 tonnes in Scotland/Orkney/Shetland.

 

Despite the low temperatures in the seas around parts of Norway this winter, the group is maintaining its overall harvesting forecast for 2010 of around 85,000 tonnes, divided between 56,000 tonnes for SalMar Central Norway, 17,000 tonnes for SalMar Northern Norway, while Norskott Havbruk aims to harvest some 24,000 tonnes, with SalMar's 50% coming to 12,000 tonnes.

 

SalMar considers the immediate outlook to be very bright. Despite record high salmon prices for the time of year, the company is experiencing strong demand. This, combined with an anticipated reduction in exports of Atlantic salmon from Chile, gives grounds to good salmon prices for a long time to come, according to the company.