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Fish Farming Central Norway and Fish Farming Northern Norway post
satisfactory results based on a good biological and operational performance.
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Low salmon prices and a challenging market affected the results for Sales &
Processing.
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Positive cost development for Icelandic Salmon, with a significantly lower
production costs for the fish harvested. However, a challenging market with
low salmon prices resulted in an operating loss.
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Guiding for 2021 maintained at 163,000 tonnes in Norway and 14,000 tonnes in
Iceland.
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The board of directors recommends a dividend of NOK 20 per share for the
2020 financial year.
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Strengthens strategic focus on offshore fish farming for sustainable growth
on the salmon’s terms.
Satisfactory result despite a challenging market
SalMar is celebrating its 30th anniversary, and can look back on three decades
of fantastic results. The company has grown to be one of the world’s largest
aquaculture companies and has unwavering faith in its capacity for further
growth. Despite a challenging market, with global uncertainty and low salmon
prices, the company has completed yet another strong year.
In the fourth quarter 2020, SalMar ASA made an Operational EBIT of NOK 413.8
million. Operational EBIT for the year as a whole totalled NOK 3 billion. The
company’s Norwegian operations posted an Operational EBIT of NOK 433.5 million
in the fourth quarter and NOK 3,058 million in 2020 as a whole. This corresponds
to an increase of 3 per cent on 2019.
- 2020 has been a challenging year, characterised by significant uncertainty for
the aquaculture industry. This uncertainty was also evident in the fourth
quarter. At the start of the year, few people would have dared to hope that we
would post a 2020 operational result that was as good as the year before.
Nevertheless, through a strategic and operational focus, as well as employees
who have demonstrated a formidable ability to adapt to new working practices, we
have done just that," says SalMar’s CEO Gustav Witzøe.
SalMar harvested a total of 43,600 tonnes in the fourth quarter 2020, compared
with 40,300 tonnes in the same period the year before. Operational EBIT per kg
came to NOK 9.50 in the fourth quarter, down from NOK 16.31 per kg in the fourth
quarter 2019. The decrease in Operational EBIT per kg is attributable largely to
a 25 per cent lower average salmon price in the fourth quarter 2020 compared
with the same period the year before. EBIT per kg for 2020 as a whole came to
NOK 18.62, down just NOK 1.42 per kg from 2019.
Biological and operational performance remains good
Fish Farming Central Norway once again posted a solid result, and reaped the
rewards of sound operations and a good biological performance. The autumn-2019
generation accounted for the entire volume harvested during the period. In the
first quarter 2021, the segment will finish harvesting the autumn-2019
generation and start harvesting the spring-2020 generation. The biological
performance of both generations has recently proved to be good. In the year’s
first quarter, costs are expected to remain at similar levels, while the volume
harvested will be slightly lower than in the quarter before. SalMar expects Fish
Farming Central Norway to harvest 107,000 tonnes of salmon in 2021.
Fish Farming Northern Norway continues its positive trend and posted
satisfactory results in the fourth quarter 2020. 80 per cent of the volume
harvested derived from fish transferred to sea farms in the spring of 2019, a
generation that has had strong biological performance and contributed to lower
costs at harvest. SalMar started harvesting the autumn-2019 generation in the
fourth quarter 2020, and will continue doing so in the first quarter 2021. This
generation has also demonstrated a good biological performance. In the first
quarter 2021, the segment expects slightly higher costs and a substantially
lower harvested volume compared with the quarter before.
For the Sales and Processing segment, the fourth quarter was characterised by a
high degree of uncertainty in the market as a result of the Covid-19 pandemic.
Nevertheless, the segment posted a satisfactory Operational EBIT of NOK 73
million in the period. For 2020 as a whole, the segment posted a strong
performance with an Operational EBIT of NOK 282 million, up from NOK 124 million
the year before.
2020 proved to be a difficult year for Icelandic Salmon, which experienced
substantial challenges at the start of the year. The company started harvesting
the 2019-generation in the fourth quarter 2020. These fish have a substantially
lower cost at harvest. Nevertheless, low price achievement led to an operating
loss in the period. The company is drawing on the lessons learned in the year
now past, and is optimistic with respect to 2021, a year in which the biological
status of the fish held at its sea farms is significantly better.
Positive outlook
The coronavirus and the associated public health measures that have been
implemented worldwide to limit its transmission have prompted greater
uncertainty in the market. However, SalMar is well equipped to handle such
crises, since it has a high degree of financial flexibility and the capacity to
process products locally before shipping them worldwide. A small number of
employees tested positive for the virus towards the end of 2020, but good
contingency plans and a robust response helped ensure that the infection did not
spread.
SalMar’s board of directors considers that the company has a solid foundation
for continued positive development, both within its offshore and coastal
operations. The company is continuing to pursue its ongoing investment
programmes to secure development of an already robust platform for further
growth.
SalMar still expects to harvest a total of 163,000 tonnes in Norway and 14,000
tonnes in Iceland in 2021.
Strengthened focus on offshore fish farming
SalMar’s focus on offshore fish farming is well known and continues the
company’s tradition of developing and utilising new technologies and new
solutions. In January 2021, an application for permission to operate the world’s
first fish farm in the open ocean, Smart Fish Farm, was submitted to the
Norwegian Directorate of Fisheries. The establishment of salmon farming in the
open ocean is an important element in SalMar’s strategy for sustainable growth.
This endeavour is described in more detail in a separate stock market
notice/press release published today.
Secured new sustainability linked financing
To strengthen financial flexibility and further strengthen the company’s focus
on sustainability, SalMar has in the beginning of 2021 refinanced its existing
credit facilities. The company has increased its overdraft facility and at the
same time entered into an agreement on a new sustainability linked credit
facility, an agreement that has four ESG KPI’s linked to it.
- Through the new facilities, we strengthen our financial flexibility and at the
same time strengthen our focus on sustainability. The agreement focuses on four
of our most important KPIs where all of them pulls us in an even more
sustainable direction, says CFO & COO Trine Sæther Romuld.
Dividend
In the past few quarters, SalMar has demonstrated its ability to adapt to
changing market conditions by posting strong results and maintaining a solid
financial position. On this basis, the board of directors is recommending that a
dividend of NOK 20 per share be paid for the 2020 financial year.
The complete report and presentation for the fourth quarter 2020 is attached.
SalMar’s CEO Gustav Witzøe and CFO & COO Trine S. Romuld will begin presenting
the company’s results at 8am CET via a webcast on www.salmar.no
(http://www.salmar.no).
For further information, please contact:
CEO Gustav Witzøe
Tel: +47 911 47 834
Email: gustav.witzoe@salmar.no (mailto:gustav.witzoe@salmar.no)
CFO & COO Trine Sæther Romuld
Tel: + 47 991 63 632
Email: trine.romuld@salmar.no (mailto:trine.romuld@salmar.no)
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 Norway, at
InnovaMar in Frøya and Vikenco in Aukra. SalMar also owns 50 per cent of the
shares in Scottish Sea Farms Ltd.
See www.salmar.no (http://www.salmar.no) for more information about the company.
This information is subject to the disclosure requirements stipulated in section
5-12 of the Norwegian Securities Trading Act.
Kilde
