Salmon producing line. (Photo: SalMar)
SalMar Group's results show salmon disease impact
Thursday, August 16, 2012, 03:10 (GMT + 9)
The issues related to the appearance of pancreas disease (PD) virus had a negative impact in the results SalMar Group obtained in the second quarter of this year.
The group recorded an operational EBIT of NOK 59.9 million (EUR 8.2 million) in the second quarter 2012 compared with NOK 112.0 million (EUR 15.3 million) a year before. The firm generated gross operating revenues of NOK 836.7 million (EUR 114.3 million) in the second quarter 2012, compared with NOK 681.7 million (EUR 93.2 million) in the same quarter in 2011.
SalMar Central Norway's lower performance was affected by PD, as PD-related harvesting has bred higher costs for fish farming operations and affected InnovaMar's efficiency. The fish may not be destroyed, however, as the Norwegian Food Safety Authority (NFSA) has now changed its practice with respect to the handling of PD in Sør-Trøndelag.
Moreover, about half the volume was harvested in June, when salmon prices were lower than in April and May.
InnovaMar and the sales division showed higher earnings during Q2 and increased activity provides a higher contribution from this part of the business.
SalMar Northern Norway boosted both its volumes and margins compared with the first quarter. Some of the harvested volume had quality problems, which has affected the price.
The Rauma segment also increased its margins compared with Q1. Results in Q2 were affected by the destruction of broodstock due to the presence of infectious salmon anemia (ISA).
SalMar owns 50 per cent of Norskott Havbruk AS, which operates fish farms in mainland Scotland, the Orkneys and Shetland. Norskott made gross operating revenues of NOK 216.8 million (EUR 29.6 million) in Q2.
SalMar now owns 25.2 per cent of P/F Bakkafrost, a Faroe Islands fish farming company which made an operational EBIT of NOK 78.9 million (EUR 10.8 million) in the second quarter. SalMar's share of the profit after tax and fair value adjustment came to NOK 23.1 million (EUR 3.2 million).
SalMar has also entered into TRS agreements for additional 4.66 per cent of the shares in P / F Bakkafrost.
"It is particularly gratifying to note that InnovaMar is performing well in an operationally challenging quarter,” CEO Ynge Myhre said. “There is still room for improvement, and moving forward our attention will be focused on operational efficiency."
SalMar considers the long-term outlook as a whole to be good, even though short-term fluctuations must be expected as a result of temporary imbalances between supply and demand in the market. The increase in the supply of Atlantic salmon in the second half of the year is expected to be far lower than in the first six months.
- SalMar wants a better way to deal with PD virus on its farms
By Natalia Real