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Announcing SalMar Group‘s Q2 results at AquaNor in Trondheim this morning, CEO Frode Arnsten looked back on “a strong quarter for SalMar”, saying “the salmon price remained at a very high level. In fact, it was the best result in history for the Norwegian part of our business”.

SalMar’s Norway business reached a landmark operational EBIT of NOK 1,790 million during the second quarter, translating to an operational EBIT per kg of NOK 40.5.

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Arnsten explained that the limited supply of Atlantic salmon, coupled with robust demand, continued to support high salmon prices during the quarter. The group as a whole achieved an operational EBIT of NOK 1,745 million across all its operations, with a total harvest of 44,300 tonnes (NOK 39.4 operational EBIT per kg).

Harvest problems in Iceland and Scotland

This was achieved despite limited harvest volume from Icelandic operations, as well as what CFO Ulrik Steinvik described as “particularly poor results” from Scottish Sea Farms, SalMar’s Scottish joint-venture with Lerøy Seafood.

“The biological situation in Scotland has remained challenging,” Steinvik said during this morning’s presentation. “The issues we faced in the second half of last year have persisted into 2023. These challenges have led to the harvest of fish with low average weight, high costs and low price realisation.”

However, SalMar’s Norwegian operations as well as its Sales & Industry divisions all reported “solid” operational performance.

“We are reporting strong performance, largely in with our expectations, and good progress in our ongoing efforts to integrate business from NRS, NTS and SalmoNor. We have recently signed a refinancing agreement at competitive terms and strengthened our balance sheet through the sale of shares in Frøy, thereby creating an even stronger foundation for further growth,” said Arntsen.

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Future investments on hold, as salmon tax begins to bite

Over the past few years, the company has made significant investments along its entire value chain. SalMar operates innovative RAS smolt facilities, coastal farming units, offshore units and has several state-of-the-art plants onshore for harvesting and processing of salmon.

However, Steinvik noted, the company’s larger industrial investments have been put on hold pending further clarification on the new resource rent tax regime.

“We clearly state our ambition to continue to grow sustainably and create value for society and for our shareholders. How soon and how much depends to a large degree on the effects of the resource rent tax which has been introduced in Norway. According to our preliminary calculations, the implementation effect alone amounts to NOK 2,3 billion,” Arntsen added.

Outlook for the rest of 2023: good in Norway and Iceland, problems will continue in Scotland

Arntsen said SalMar is maintaining its volume guidance for 2023 unchanged at 243,000 tonnes in Norway and 16,000 tonnes in Iceland. For Scottish Sea Farms the volume guidance is reduced to 27,000 tonnes.

In Norway, the group expects significantly higher volume and similar cost level in the third quarter 2023 compared to the second quarter 2023. Higher harvest volume is also expected during Q3 in Iceland.

For the third quarter 2023, the contract rate in Norway is expected to be around 15%, compared to the full-year prediction of 16%.

About SalMar

SalMar is one of the world’s largest and most efficient producers of salmon. The Group has farming operations in Central Norway, Northern Norway, and Iceland, as well as substantial harvesting and secondary processing operations in Scotland. In addition, the company is operating within offshore aquaculture through the company SalMar Aker Ocean and SalMar owns 50% of the shares in Scottish Sea Farms Ltd.

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