Higher costs dent Bakkafrost Q3 re­sults

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THE Bakkafrost Group, the prin­ci­pal fish farming com­pany in the Faroe Is­lands, an­nounced a slightly lower to­tal op­er­at­ing EBIT (earn­ings be­fore in­ter­est and tax) of 206 mil­lion Dan­ish kro­ners (DKK) for the third quar­ter of this year.

Higher costs are mainly to blame for the small drop, but de­spite this all seg­ments still de­liv­ered pos­i­tive re­sults.

This com­pares with DKK 209 mil­lion dur­ing the third quar­ter in 2014. Har­vested vol­umes were al­most 13,000 tonnes gut­ted weight this third quar­ter. The re­sult af­ter tax in Q3 2015 was DKK 168 mil­lion.

The com­pany said the to­tal vol­umes har­vested in Q3 2015 were 12,982 tonnes gut­ted weight, which is an in­crease of 19 per cent, com­pared with the same pe­riod in 2014.

The farming seg­ment de­liv­ered an op­er­a­tional EBIT of DKK 183 mil­lion in Q3 2015. The VAP (value added prod­ucts) seg­ment, which pro­duced 3,745 tonnes in Q3 2015, made an op­er­a­tion- al EBIT of DKK nine mil­lion. The FOF seg­ment de­liv­ered an EBITDA of DKK 42 mil­lion dur­ing this quar­ter. Bakkafrost CEO Re­gin Ja­cob­sen said: ‘The mar­gins fell in this quar­ter and this re­lates mainly to in­creased costs. ‘Al­though there were higher costs, all seg­ments de­liv­ered pos­i­tive re­sults in the quar­ter. With the de­liv­ery of the live fish car­rier Hans á Bakka in the third quar­ter, we made a sig­nif­i­cant step for­ward in our strat­egy to re­duce bi­o­log­i­cal risk and im­prove ef­fi­ciency.

‘The out­look for the mar­ket re­mains tight be­cause no one expects sup­ply growth in 2016.’

Bakkafrost re­leased 2.8 mil­lion smolts in Q3 2015, which is in line with the com­pany’s smolt release plan.

Bakkafrost feed com­pany Havs­brún’s sourc­ing of raw ma­te­rial in the first nine months of 2015 has been sim­i­lar to the first nine months in 2014. Havs­brún pur­chased 10,000 tonnes of raw ma­te­rial in Q3 2015, and pur­chase of raw ma­te­rial in the first nine months of 2015 amounted to 171,000 tonnes.

Bakkafrost’s net in­ter­est bear­ing debt at the end of Q3 2015 was DKK 182 mil­lion, com­pared with DKK 233 mil­lion at year-end 2014. Bakkafrost had un­drawn credit fa­cil­i­ties of ap­prox­i­mately DKK 802 mil­lion at the end of Q3 2015, and the eq­uity ra­tio was 63 per cent.

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