Norway Royal Salmon takes earnings hit
COVID-19 is set to take quite a toll on the performance of salmon farming companies this year, the Q3 figures from Norway Royal Salmon indicate.
NRS was the first of the big producers to publish its 2020 third quarter results and the company announced an operational EBIT of 35 million in Norwegian kroner NOK (£2.8 million), and an EBIT of NOK 4.21 per kg.The corresponding earnings figures for the July to September period last year were NOK
131 million (£10.6m) and NOK 19.60 (£1.59) per kg, falls of 73 per cent and 78.5 per cent respectively.
Given the impact of coronavirus on the restaurant and catering trade in Europe, the results were not unexpected and the company was in positive mood. It also said it plans to strengthen its stake in its Iceland investment.
CEO Charles Høstlund said the market price of salmon has, as normal, been seasonally low during the summer months, but had also been impacted by the pandemic and high production costs.
He added:“We have had good growth throughout the quarter, and by starting to harvest a new generation we expect lower production costs in the next quarter. NRS has a strong financial position with NOK 1,103 million (£89m) in unutilised credit facilities at the end of the third quarter.After the end of the quarter, NRS was offered NOK 800 million in an increased loan facility with a sustainability term loan, which will further increase the group’s financial headroom.
Farming posted an operational EBIT of NOK 42.3 million (£3.42 million) compared with NOK 138.7 million (£11.2 million) in the corresponding quarter last year, down 69.5 per cent. Harvest volumes were up by 42 per cent to 10,058 tonnes, gutted weight. For 2020, the harvest volume is expected to be 32,500 tonnes gutted weight and for 2021 the harvest volume is estimated at 40,000 tonnes, an increase of 23 per cent on 2020.The estimated smolt put to sea for 2020 is 10 million smolts.