SalMar strongest quarter ever

November 1, 2010 10:40

The SalMar Group posted an operating profit before fair value adjustment of the biomass of NOK 300.7 million in the third quarter 2010, reports www.megafishnet.com with reference to SalMar.

This is 34 per cent higher than in the same quarter in 2009. Both the Central Norway and Northern Norway segments posted record results for profit per kg gutted weight and overall operating profit. In its first quarter as part of the SalMar Group, Rauma Gruppen AS also performed extremely well. The results are due to a combination of high salmon prices, good operational efficiency and continued satisfactory biological development in the biomass.

The SalMar Group generated gross operating revenues of NOK 1,002.3 million in the third quarter 2010, compared with NOK 688.3 million in the corresponding quarter in 2009. The Group made an operating profit before fair value adjustment of the biomass of NOK 300.7 million, compared with NOK 225.1 million in the corresponding quarter in 2009. For SalMar Central Norway this resulted in an operating profit of NOK 16.38 per kg gutted weight, while SalMar Northern Norway made an operating profit of NOK 17.05 per kg gutted weight.

SalMar owns 75.5 per cent of Rauma Gruppen AS, which operates eight fish farming licences in Romsdalsfjorden in Møre & Romsdal County. The business generated operating revenues of NOK 160.0 million during the quarter, and made an operating profit before fair value adjustment of the biomass of NOK 48,9 million. The margin per kg gutted weight in the quarter came to NOK 17.16.

 SalMar owns 50 per cent of Norskott Havbruk AS, which operates fish farms in mainland Scotland, the Orkneys and Shetland. The business generated operating revenues of NOK 238.7 million in the third quarter 2010, and made an operating profit before fair value adjustment of the biomass of NOK 63.0 million. The margin per kg gutted weight in the quarter came to NOK 10.19. 

"The positive trend which the SalMar Group has experienced in 2010 has continued in the third quarter," said CEO Leif Inge Nordhammer. "We are pleased to be announcing record results from both SalMar Central Norway and SalMar Northern Norway. Rauma Gruppen's performance was also very satisfactory. We will continue our efforts to achieve operational improvements in all areas. We will be focusing particularly on further harmonising our operations in central Norway to extract the synergies available. The price of salmon, which was 20 per cent higher than in the same quarter last year, has contributed to our strong results, along with our unwavering focus on fish health and welfare, and operational efficiency."

Including Rauma Gruppen AS and the Group's 50 per cent share of Norskott Havbruk AS, SalMar harvested some 22,700 tonnes gutted weight in the third quarter. This breaks down as follows: 11,700 tonnes from SalMar Central Norway, 5,100 tonnes from SalMar Northern Norway, 2,800 tonnes from Rauma Gruppen, and 3,100 tonnes in Scotland/Orkneys/ Shetland.

SalMar's key figure for profit performance under IFRS is EBIT (operating profit) before fair value adjustment of the biomass. Adjustment of the fair value of the biomass results from the requirement to value biological assets (the biomass) at fair value instead of cost price. SalMar reports EBIT before fair value adjustment of the biomass in order to show the underlying performance of its operations during the period.

The relatively low sea temperatures in Norway in 2010 have not provided optimal feeding and growth conditions. This has led to SalMar reducing its 2010 guiding for SalMar Central Norway from 56,000 tonnes to 53,000 tonnes, and for SalMar Northern Norway from 17,000 tonnes to 16,000 tonnes. The harvesting forecast for Norskott Havbruk remains unchanged at 24,000 tonnes, with SalMar's 50 per cent share coming to 12,000 tonnes. Rauma Gruppen expects to harvest 8,000 tonnes in 2010. 

SalMar considers its outlook to be very good. Despite record salmon prices, the company is experiencing strong demand. SalMar believes this strong demand, combined with developments in the global production of salmon, give grounds for strong salmon prices in the time ahead. At the same time the aquaculture industry in Norway has a considerable growth potential.

For further information, please contact:

Leif Inge Nordhammer, CEO, +47 916 85 250

Roar Husby, CFO, +47 982 06 974

See also the company's website: www.salmar.no

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