2008 has started well for SalMar, despite lower salmon prices than in the corresponding period last year. The company's financial performance is good, and the progress made by SalMar Northern Norway is particularly pleasing.
SalMar achieved operating revenues of NOK 348.5 million in the first quarter 2008. Operating profit before fair value adjustment of the biomass totalled NOK 63.5 million in the first quarter 2008, compared with NOK 137.8 million in the corresponding quarter in 2007. The change in operating profit can largely be ascribed to lower salmon prices and lower harvest volumes than in the same period last year. However, the volume harvested is in accordance with the company's plans, and the target for total volume harvested in 2008 remains in effect.
"We are pleased with our performance during the first three months of the year. SalMar has again posted good operating margins despite the price of salmon being lower than in the same period last year. Operating margins for SalMar Central Norway are good and, the lower price of salmon notwithstanding, SalMar Northern Norway has improved its operating margin further," says CEO Leif Inge Nordhammer. "We continue to have a sound biological situation at our farming facilities. Maintaining a strong focus on the biology and operational efficiency is the most important contribution our employees can make to SalMar's continued growth."
SalMar ASA had operating revenues of NOK 348.5 million in the first quarter 2008, compared with NOK 423.8 million in the corresponding period last year. The change can be ascribed to lower salmon prices and lower harvested volumes.
The Group made a consolidated operating profit before fair value adjustment of the biomass of NOK 63.5 million in the first quarter 2008, compared with NOK 137.8 million in the corresponding quarter last year. The result must be seen in light of the fact that the price of salmon was lower in the first quarter 2008 than in the same period in 2007. This resulted in a first-quarter operating profit per kg gutted weight of NOK 7.72 for SalMar Central Norway and NOK 3.72 for SalMar Northern Norway.
SalMar also owns 50 per cent of Norskott Havbruk AS, which in turn has fish farming operations in mainland Scotland and the Shetlands (through Scottish Sea Farms Ltd.). The business had operating revenues of NOK 195.7 million in the first quarter 2008 and made an operating profit of NOK 22.6 million, compared with NOK 64.7 million operating profit in the same period last year.
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. Changes in price and the composition of the biomass during a period can have a major impact on this value, as is the case in this quarter. SalMar reports EBIT before fair value adjustment of the biomass in order to show the underlying performance of its operations during the period.
The price of salmon in the first quarter 2008 has been lower than in the corresponding quarter last year, but higher than in the fourth quarter 2007. The industry has performed well at the start of 2008, with export volumes at the end of April higher than at the same point a year ago. France, Russia and Poland are among the countries to which export volumes are increasing the most.
The SalMar Group, including Norskott Havbruk AS, expects to harvest approx. 73,000 tonnes gutted weight in 2008. For the year as a whole this breaks down to approx. 47,000 tonnes gutted weight for SalMar Central Norway and approx. 13,000 tonnes gutted weight for SalMar Northern Norway. Norskott Havbruk is expected to harvest some 26,000 tonnes gutted weight, with SalMar's 50 per cent share amounting to approx. 13,000 tonnes.
For further information, please contact:
Leif Inge Nordhammer, CEO: +47 916 85 250
Roar Husby, CFO: +47 982 06 974
