SalMar - Results for the third quarter 2018

Kverva, NORWAY

SalMar ASA delivered a strong performance in the third quarter 2018, driven by cost improvements and good price achievement. Operational EBIT for the quarter totalled NOK 939.1 million compared with NOK 801,3 million in the same period last year.

"Efficient operations and a strong biological performance have helped SalMar deliver a strong financial result. This achievement has been made possible by the dedication and hard work of our employees, whose efforts have contributed to lower costs, good price achievement and increased efficiency in our harvesting and processing plants," says SalMar's CEO Olav-Andreas Ervik i SalMar.

Gross operating revenues totalled NOK 2.8 billion in the period, up from NOK 2.7 billion in the third quarter 2017. A total of 36,100 tonnes of salmon were harvested in the third quarter 2018, compared with 34,000 in the same period last year. The price of salmon (NASDAQ) in the period averaged NOK 54.80 per kg, down NOK 1.75 per kg from the same period last year. Despite the lower prices, SalMar increased its EBIT per kg by NOK 2.31 to NOK 26.03.

Fish Farming Central Norway posted a strong Operational EBIT in the third quarter. The bulk of the fish harvested during the period had been transferred to the sea in the spring of 2017. This generation has performed very well biologically, with low mortality and few delousing treatments, which has resulted in low production costs.

As planned, the volume harvested by Fish Farming Northern Norway was low in the third quarter. Investments in new MAB capacity, as well as a lower than anticipated growth rate, resulted in a change in harvesting plans in order to optimise MAB utilisation and the volume potential of the standing biomass. As expected, the cost of the biomass harvested in the third quarter was higher than previously achieved. The increase can be attributed largely to high fixed unit costs resulting from a low volume. In the fourth quarter SalMar expects a significant increase in the volume harvested and costs are forecast to fall compared to the third quarter.

The Sales and Processing segment posted a profit of NOK 73.1 million in the quarter, up from NOK 46,2 million in the same period last year. The improvement has been driven by good price achievement. Around 42 per cent of the volume was sold under fixed-price contracts at above spot price. Record-high volumes have, moreover, led to improved capacity utilisation and operating efficiency in the harvesting and processing plants.

The contract rate for the fourth quarter 2018 stands at 35 per cent as at 9 November.

Based on estimates of the standing biomass at the close of the third quarter 2018, the global supply of Atlantic salmon in 2018 as a whole is expected to rise by 4 per cent and 5 per cent in 2019. Combined with expectations of strong demand, this indicates a balanced salmon market, with the outlook for continued favourable earnings.

SalMar maintains its target to harvest 143,000 tonnes of salmon in Norway in 2018: 100,000 tonnes in Central Norway and 43,000 tonnes in Northern Norway. Norskott Havbruk (Scottish Seafarms) is expected to harvest 26,000 tonnes, while Arnarlax is expected to harvest a total of 6,100 tonnes in 2018.

In 2019, SalMar expects to harvest 145,000 tonnes in Norway.

The complete report for the third quarter 2018 is attached.

For further information, please contact:
CEO Olav-Andreas Ervik
Tel: +47 918 68 100

CFO Trond Tuvstein
Tel: +47 918 53 139

See for more information about the company.

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


SalMar Q3 2018 presentation SalMar Q3 2018 report