SalMar - Results for the second quarter 2017

STRONG QUARTER FOR THE SALMAR GROUP

Continued good operations combined with high salmon prices gave SalMar a strong quarterly result in the second quarter 2017. The Group's Operational EBIT totalled NOK 983.0 million in the period, up from NOK 670.7 million in the previous quarter and from NOK 731.8 million in the same period last year. Overall, the SalMar Group achieved an operating profit per kg gutted fish of NOK 28.12, up 10 per cent on the previous quarter and a hike of 24 per cent compared with the second quarter last year.

"SalMar's strong results derives from continued good operations and yet another quarter with high salmon prices. The biological situation was slightly better than in the same period last year, but managing the sea lice issue remains challenging. SalMar has implemented a number of initiatives to improve the situation, in combination with a continued increasing focus on fish welfare. Measures to manage the lice situation are costly, and a high treatment frequency rate will negatively affect production costs in comming quarters," says SalMar's CEO Trond Williksen.

SalMar generated gross operating revenues of NOK 2.9 billion in the quarter, up from NOK 2.3 billion in the same period last year. The Group harvested 35,000 tonnes, compared with 32,200 tonnes in the second quarter 2016. Operational EBIT totalled NOK 983.0 million, up from NOK 731.8 million in the second quarter last year. In the first quarter 2017, the Group harvested 26,300 tonnes of salmon and made an Operational EBIT of NOK 670.7 million.

The biological situation facing SalMar's Fish Farming Central Norway segment remains challenging. Over time, SalMar has invested heavily in non-medicinal delousing equipment and related competence. The combined expenses associated with such treatment increased costs and will continue to have a negative impact on the segment's cost level in coming quarters. However, other cost-reduction initiatives will offset this to some degree.

The biological situation facing SalMar's Fish Farming Northern Norway segment is favourable, and there was no need for delousing operations in connection with the quarter's spring delousing period. In May, ISA was identified at one of the segment's sites in Troms. This led to slightly higher logistics and handling costs for the segment during the period. ISA was not identified at any other sites in the area.

The biological situation in Central Norway remains challenging for the Sales and Processing business. Fluctuations in volume from week to week affect operational efficiency. Furthermore, significant price and volume variations impair the sales organisation's ability to optimise spot sales. The period's operating loss is primarily attributable to the fact that around 40 per cent of the volume was sold under contract at prices below the average spot price for the period. The contract rate for the second half of 2017 is expected to be around 50 per cent, with a similar price level as in the first half of this year.

For 2017 as a whole, SalMar plans to harvest around 131,000 tonnes in Norway, with 83 000 tonnes being harvested in Central Norway and 48,000 tonnes in Northern Norway. Norskott Havbruk (Scottish Seafarms) and Arnarlax are expected to harvest 30,000 tonnes and 10,000 tonnes respectively.

For further information, please contact:
CEO Trond Williksen,
Tel: + 47 916 30 173
Email: trond.williksen@salmar.no

CFO Trond Tuvstein,
Tel: + 47 918 53 139
Email: trond.tuvstein@salmar.no

See also www.salmar.no for further information about the company.

This information is subject to the disclosure requirements stipulated in section 5-12 of the Norwegian Securities Trading Act.