December 3, 2021

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Bakkafrost disappointing with sharp drop in Q3 - E24

Bakkafrost disappointing with sharp drop in Q3 – E24

Salmon farms in the Faroe Islands have biological problems and higher costs, and it cuts harvest forecasts for 2021 by 10,000 tons in Scotland.

Salmon Company presents the third quarter figures.

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Bakkafrost delivers Operating profit before adjustments of DKK 70.5 million in the third quarter, compared to DKK 103 million at the same time last year.

Previously, 296 million DKK were expected, according to TDN Infront figures.

There are several factors that reduce operations in the quarter, both in the Faroe Islands and Scotland.

“In the Faroe Islands, we have made a conscious decision about early slaughter at the A72 Haraldsund plant to restore simultaneous production plans with the neighboring plant A-72 Viðareiði. This resulted in higher costs and lower carnage weights and price breakthroughs in the quarter,” CEO Regen Jacobsen wrote.

“This is a one-off event and in the future we will benefit from synchronizing facilities with better control of biological risks and improved operational efficiency,” he adds.

The most challenging third quarter

In addition, the results are negatively affected by delays in new lice removal equipment, related to birth problems related to the epidemic. This has also led to a higher death rate in the quarter.

In Scotland, there were biological problems that led to significant deaths.

Backafrost notes that the second half of the year, and especially the third quarter, has historically proven to be the most challenging period for farming in Scotland.

This pattern is expected to continue over the next few years, but with gradually decreasing intensity with respect to the strategy of releasing larger vials (small fish).

Altogether, the result ended up at 131 million DKK, down from 177 million in the same quarter of 2020. The fish’s value adjustment was 114 million in the quarter, compared to 124 million last year.

Cuts the targets of slaughter

The company harvested 14,937 tons in the Faroe Islands and 6.91,400 tons in Scotland during the quarter, in line with previous update.

In the previous quarterly report, Backfrost’s harvest target for the whole of 2021 was 66,000 tonnes in the Faroe Islands and 40,000 tonnes in Scotland. The target for Scotland has now been reduced to 30,000 tons. In total, this still means an increase to 96,000 tons from 85,686 tons in 2020.

In the long term, the goal is to increase production to 150,000 tons in 2026. From 2022 to 2026, Bakkafrost will invest 6.2 billion DKK to ensure this growth.

During the quarter, the company saw further market normalization, after the pandemic hit the salmon industry since the first quarter of 2020.

Bakkafrost sells salmon to Europe, the United States, East Asia and Russia.

With a market capitalization close to NOK 45 billion ahead of today’s numbers, Bakkafrost is the third largest salmon company on the Oslo Stock Exchange.

Here you will find the numbers

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