Higher costs dent Bakkafrost Q3 results
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.