SALMAR POSTS RECORD PROFITS IN THIRD QUARTER 2009
The SalMar Group posted operating profits of NOK 225 million in the third quarter. This is the highest operating profit in a single quarter ever achieved by the Group, and is three times the figure posted for the same quarter in 2008. The improvement can be ascribed to strong operational efficiency, an improved biological situation, as well as high harvest volumes and salmon prices through the quarter.
The SalMar Group generated gross operating revenues of NOK 688.3 million in the third quarter 2009, compared with NOK 394.6 million in the same quarter in 2008. The Group made an operating profit before fair value adjustment of the biomass of NOK 225.1 million in the third quarter 2009, compared with NOK 74.0 million in the same quarter in 2008. For SalMar Central Norway this resulted in a profit per kg gutted weight of NOK 12.22, while SalMar Northern Norway achieved a profit per kg of NOK 9.86 during the quarter.
"The third quarter was an very strong quarter for the SalMar Group," said SalMar CEO Leif Inge Nordhammer. "Both SalMar Central Norway and SalMar Northern Norway posted their strongest ever results, while Scottish Sea Farms continues to deliver good profitability.
"The biological situation improved during the quarter, compared with previous periods, and we have produced and harvested considerable volumes at a time when the price of salmon remained relatively high. During the quarter we also renegotiated a substantial proportion of our contract positions, and have thereby achieved higher prices for processed products compared with earlier in the year.
"We are optimistic with regard to the development of the company and the industry as a whole in the coming quarters. Due to the sharp drop in output from Chile the global supply of salmon is being cut, and as a result salmon prices should stabilise at a relatively high level."
SalMar owns 50 per cent of Norskott Havbruk AS, which operates fish farms in mainland Scotland, the Orkneys and Shetland. The business generated gross operating revenues of NOK 239.7 million in the third quarter 2009, and made an operating profit before fair value adjustment of the biomass of NOK 38.7 million, up from NOK 8.6 million in the corresponding quarter in 2008.
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 SalMar Group, including its 50 per cent share of Norskott Havbruk AS, harvested some 23,400 tonnes gutted weight during the third quarter. SalMar Central Norway harvested 14,800 tonnes, SalMar Northern Norway harvested 5,200 tonnes, while 3,400 tonnes was harvested in Scottish Sea Farms.
The export price of fresh whole salmon was around NOK 4 higher in the third quarter 2009 than in the same quarter last year. During the first half of the year the relative weakness of the NOK against the EUR, USD and JPY helped to keep up the price paid to the salmon farmer, but the NOK strengthened during the third quarter, putting salmon prices somewhat under pressure.
Nevertheless SalMar considers the outlook to be good. Due to the sharp drop in output from Chile, the global supply of salmon has fallen. In SalMar's view, therefore, there is reason to believe that salmon prices will continue to remain strong in the time ahead.
After the close of the quarter SalMar was granted a further licence for the production of organic salmon, bringing the number of organic salmon production licences received during this year's allocation round to three. Several of SalMar's partner companies were also granted licences, which in the slightly longer term will increase the volumes being handled by SalMar's harvesting and production facility on the island of Frøya.
For further information, please contact:
Leif Inge Nordhammer, CEO, +47 916 85 250
Roar Husby CFO, +47 982 06 974
or visit www.salmar.no
Leif Inge Nordhammer, CEO, +47 916 85 250
Roar Husby CFO, +47 982 06 974
or visit www.salmar.no
