SalMar – Results for the third quarter of 2019

SalMar ASA made an Operational EBIT of NOK 613.5 million for the third quarter of 2019, compared with NOK 939.1 million for the same period last year.“For the SalMar Group, the third quarter was a mixed experience Central Norway posted satisfactory results, in line with our expectations. Sales and Processing achieved good results on the back of efficient operations and a good allocation of volumes in a challenging period with declining prices. However, Northern Norway’s performance was very weak,” says SalMar’s CEO Gustav Witzøe.“In SalMar we are always looking for possibilities to improve our operational performance. Through the creation of SalMar Ocean the we aim to coordinate and strengthen our efforts within offshore fish farming. We see a significant potential within offshore fish farming and by doing this we want to maintain our leading position in this area both with relation to technological developments and biological production. This will contribute to an environmentally sustainable development of Norwegian aquaculture industry in the years to come,” SalMar’s CEO Gustav Witzøe.SalMar generated gross operating revenues of just under NOK 2.8 billion for the quarter, on a par with the corresponding period last year. The Group harvested some 35,800 tonnes, 300 tonnes less than in the same period in 2018. SalMar’s Operational EBIT per kg came to NOK 17.12 for the third quarter of 2019, a decrease of NOK 8.91 per kg compared with the same period last year. The lower profit margin is largely attributable to lower salmon prices and poor results in Northern Norway.Fish Farming Central Norway posted satisfactory results. The fish harvested were largely salmon that had been transferred to sea farms in the spring of 2018, a generation that has performed well biologically. Towards the end of the period, in order to reduce the risk posed by salmon lice in Central Norway, SalMar chose to start harvesting fish transferred to sea farms in the autumn of 2018 earlier than planned. This had a negative effect on costs, average weight and price achievement for the quarter. For the same reason, the segment’s costs are expected to be slightly higher and volume somewhat lower in the fourth quarter.In recent quarters, Fish Farming Northern Norway’s cost level has been disappointing, and its performance in the third quarter was very weak. This is mainly due to biological challenges. Illness and the risk of illness has resulted in fish being harvested earlier than planned, which has negatively affected both price achievement and costs. The sites that had biological challenges was emptied out by the end of the third quarter and SalMar therefore expects a substantially lower cost level and a higher volume the fourth quarter where one will harvest from sites that have performed better biologically and have lower costs than those harvested in the third quarter.Arnarlax posted yet another positive result. High average weight for the fish harvested led to good price achievement, while production costs remained at the same level as earlier in the year. Compared with last year, Arnarlax’s result in the period was a sharp improvement due to better biological performance and operational improvements. Arnarlax expects costs and volume to remain at the same level in the fourth quarter.SalMar’s Sales and Processing segment made an operating profit of NOK 102.3 million for the third quarter of 2019. Good allocation of sales and efficient operations produced good results in a period of falling prices. At the same time, lower prices resulted in higher margins on fixed-price contracts. As at 13 November 2019, SalMar has secured fixed contracts covering 20 per cent of its planned sales volume in the fourth quarter.The global supply of Atlantic salmon is expected to increase by around 7 per cent in 2019 and by 4 per cent in 2020. Combined with expectations of good demand, this indicates a balanced salmon market, with the outlook for continued good prices.SalMar maintains its expectations to harvest a total of 145,000 tonnes of salmon in Norway and 10,000 tonnes in Iceland in 2019. In 2020, the company expects to harvest 152,000 tonnes in Norway and 10,000 tonnes in Iceland.The complete report and presentation for the third quarter 2019 is attached.SalMar’s CEO Gustav Witzøe and CFO & COO Trine S. Romuld will present the company’s results today at 8am at Hotel Continental in Oslo.For further information, please contact:CEO Gustav Witzøe,
Tel: +47 911 47 834
Email: gustav.witzoe@salmar.noCFO Trine Sæther Romuld,
Tel: + 47 991 63 632
Email: trine.romuld@salmar.noSee also www.salmar.no 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.AttachmentsSalMar Q3 2019 reportSalMar Q3 2019 presentation