Harvested volume 203 % higher than corresponding prior-year period

Norway Royal Salmon reports high increase in operating profit for Q3

NORWAY
Wednesday, November 13, 2019, 05:10 (GMT + 9)

Norway Royal Salmon (NRS) on Tuesday reported an operational EBIT of NOK 131 million (USD 14.3 million) for the third quarter 2019, which represents an astonishing 285 per cent increase compared to NOK 34 million (USD 3.7 million) in the same quarter last year.

However, the  operational EBIT per kilogramme decreased from  NOK 22.10 in Q3 2018 to  NOK 17.97 and the profit after tax dropped from NOK 152.4 million to NOK -24 million.

In its Interim Report Q3-19, NRS highlights:

• Operational EBIT of NOK 131 million   
   - Operational EBIT per kg of NOK 19.60 in Region North
   - Operational EBIT per kg of NOK -8.45 in Region South
   
• Stable and good performance on harvested fish from the Group’s main operations in Region North, but weak results from Region South
   
• Harvested volume 203 % higher than corresponding prior-year period
   
• The biomass in the sea increased by 6 749 tonnes (32 per cent) in the third quarter and additional biomass build-up is planned in the fourth quarter
   
• Lower production due to low sea water temperatures in Finnmark
   
• Signed sale agreement on Region South at an enterprise value of  NOK 1 240 million. The transaction is expected to be completed in December 2019

"The Group's main operations in Region North contributed with a stable and good performance on harvested fish, while Region South had a weak result in the quarter. NRS shall grow through sustainable growth, the Group increased its biomass in the sea by 32 % during the quarter and plans to increase the biomass further in the fourth quarter," says CEO Charles Høstlund.

Payments for growth investments in Arctic Offshore Farming and the new smolt facility, as well as the buildup of biomass in the sea has resulted in an increase in net interest-bearing debt in the quarter to MNOK 926.

Equity at the end of the quarter is MNOK 2,278, which equates an equity ratio of 50.3 per cent. Return on capital employed for the last four quarters is 33 per cent.

Region North

Region North posted an operational EBIT of MNOK 138.7 in the quarter, compared with MNOK 53.0 in the corresponding quarter last year. Operational EBIT per kg gutted weight was NOK 19.60 compared with NOK 22.27 in the corresponding quarter last year.

Region South

Region South posted an operational EBIT of MNOK -3.7 in the quarter, compared with MNOK 1.8 in the corresponding quarter last year. Operational EBIT per kg gutted weight was  NOK -8.45, compared with NOK 18.05 in the corresponding quarter last year.

The strategic assessment of the Group's operations in Region South was completed with a signed sales agreement on September 26 with an enterprise value of MNOK 1 240. The transaction is expected to be completed in December 2019. Region South has therefore been treated as an entity held for sale in the third quarter reporting.

NRS harvested 7,513 tonnes gutted weight in the quarter, which is 203 % higher than in the same quarter last year. 7,076 tonnes of the total volume were harvested in Region North and 437 tonnes in Region South.

Estimated harvest volume for 2019 has been reduced by 4,000 tonnes since the last quarterly report to 31,000 tonnes gutted weight. The company explained that this as a result of continued low sea water temperatures in Finnmark, planned biomass build-up and the sale of Region South with effect from December 2019.

Click to enlarge

Estimated harvest volume for 2020 is 37,000 tonnes, an increase of 32 per cent compared with the volume of Region North in 2019. The estimated number of smolt put to sea in 2019 is 12.1 million, of which 10.1 million in Region North and 2.0 million in Region South. The sales business sold 24,736 tonnes salmon during the quarter, which is 66 % higher than in the corresponding quarter last year.

(1 NOK = 0.10933 USD)

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