Demand for NRS salmon increased significantly during the fourth quarter and the first quarter of 2022

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Norway Royal Salmon (NRS) has reported an operating EBIT (earnings before interest and taxes) of NOK 102 million for the fourth quarter of 2021 and an EBIT per kg of NOK 9.43. The corresponding figures for the same quarter last year were NOK 17 million and NOK 5.05. Demand for salmon increased significantly during the fourth quarter and the first quarter of 2022.

For the 2021 financial year, the Norwegian company NRS has operating revenues of NOK 5.8 billion, an increase of 23 % compared to 2020. Operating EBIT for 2021 was NOK 344 million, an increase of 40 % over the previous year. Net profit after tax was NOK 693 million for 2021.

Very strong demand, and expectations of a decline in global harvest volumes in the first half of 2022, provide the basis for a very positive market outlook for salmon in the future. Moreover, the production of fish from the new smolt facility and the phasing out of triploid fish in the coming years are expected to lead to a decrease in production costs in the coming years.

“We are pleased that production at our new smolt facility in Dåfjord has been good, which will secure NRS’ smolt production from the second quarter onwards,” said interim CEO Klaus Hatlebrekke.

At the end of the fourth quarter, NRS has a strong financial position with NOK 1,192 million in undrawn credit facilities and NOK 65 million in bank deposits.

Payments for growth investments in Arctic Offshore Farming and the new salmon farming facility, as well as increased receivables explain the increase in interest-bearing debt from NOK 396 million to NOK 2,581 million in the fourth quarter. Shareholders’ equity was NOK 4,443 million at the end of the quarter, equivalent to an equity ratio of 53 %.

Farming Norway and Iceland

On the other hand, Farming Norway recorded an operating EBIT of NOK 95.4 million in the quarter, compared with NOK 36.1 in the corresponding quarter last year. Operating EBIT per kg eviscerated weight was MNOK 9.25, compared to MNOK 5.05 in the corresponding quarter last year.

Farming Norway harvested 10,319 tons gutted weight in the quarter, an increase of 44 % compared to the same quarter last year. The sales volume of the sales business in the quarter was 23,871 tons of salmon, 3 % more than in the corresponding quarter last year.

Meanwhile, Farming Iceland recorded an operating EBIT of NOK 29.5 million in the quarter, compared with NOK -13.8 million in the same quarter last year. Operating EBIT per kg eviscerated weight was NOK 10.05, compared with NOK -4.62 in the corresponding quarter last year.

Farming Iceland harvested 2 938 tons gutted weight in the quarter, which is approximately the same as in the corresponding quarter last year.

In the report provided by the company, NRS explains that in the first quarter of 2022, Arctic Fish experienced biological problems at two sites. “Our skilled employees have made a great effort to handle the situation in the best possible way. The situation is now considered stable,” said Klaus Hatlebrekke.

For 2021, the group’s total harvest volume was 49 640 tons. By 2022, the group’s total harvest volume is expected to be 45 100 tons, of which 35 000 tons in Norway and 10 100 tons in Iceland.

By 2023, the group’s total harvest volume is expected to be 63,000 tons, of which 50,000 tons in Norway and 13,000 tons in Iceland. In 2021, the group will release 10.7 million smolts, of which 8.0 million in Norway and 2.7 million in Iceland.

By 2022, smolt releases are estimated at 16.6 million, of which 13.0 million in Norway and 3.6 million in Iceland.

This significant increase in smolt releases supports expectations of a significant increase in catch volumes in the coming years.

NRS stated in a press release that it “believes that sustainable salmon production is very important for our long-term economic value creation”.

Three new ratings

In their balance sheet, NRS members also reported that the company earned the following three ESG ratings from CDP for 2021: score A- and is ranked as one of the leading companies for both supplier engagement on climate change and for managing deforestation risk in our supply chain and score B for climate change management.

“Although we are only at the beginning of our journey towards a low-carbon economy, we are pleased to see that our efforts so far have been rewarded with good scores,” said Klaus Hatlebrekke.

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