NRS builds up biomass

Norway Royal Salmon (NRS) posted EBIT before fair value adjustments and non-recurring items of MNOK 2.2 in the third quarter of 2012. Compared with the corresponding period last year, a lower volume at a slightly lower market price has been harvested. Low prices in the quarter have resulted in postponed harvesting.

NRS's operating revenue in the third quarter of 2012 was MNOK 412 compared with MNOK 431 in the same quarter of 2011. During the quarter a cost of NOK 9.9 million was recorded as non-recurring items. The reason is extraordinary mortality caused by high algae flora (flagellates) and low oxygen levels in a cage at the processing plant. Otherwise the biological status is good. The operating profit after fair value adjustments and non-recurring items for the quarter was MNOK 32.7, an improvement of MNOK 52.3 compared with the corresponding period last year.

The biomass build up will continue and a full utilization of MAB for the group is expected in the fourth quarter of 2012. NRS has good financial flexibility and at the end of third quarter, the group's net interest-bearing debt to the Group's bank was MNOK 428 of a total credit facility of MNOK 612. At the close of the quarter the company's equity had increased by MNOK 16 to MNOK 606, which corresponds to an equity ratio of 37.5 per cent.

Region North Region North posted EBIT of MNOK 2.7 in the third quarter 2012, compared with MNOK 10.6 in the corresponding quarter last year. EBIT per kg gutted weight was NOK 1.13 in the third quarter 2012, compared with NOK 2.83 in the corresponding quarter last year. The production cost is NOK 0.64 higher per kg than in the third quarter of 2011. Achieved sales price in the quarter was NOK 1.51 lower per kg compared with the corresponding quarter last year and explains the reduction in EBIT-margin.

Region South Region South posted EBIT of MNOK 3.5 in the third quarter 2012, compared with MNOK 1.4 in the corresponding quarter last year. EBIT per kg gutted weight was NOK 1.89 in the third quarter 2012, compared with NOK 0.54 in the corresponding quarter last year. The production cost is NOK 2.90 lower per kg than in the third quarter of 2011. Achieved sales price in the quarter was NOK 2.20 lower per kg compared with the corresponding quarter last year.

4,243 tons gutted weight was harvested during the quarter, a decrease of 33 per cent compared with the same quarter last year. 2,408 tons of the total volume was harvested in Region North and 1,835 tons in Region South. Estimated volume for 2012 is 21,500 tons, which is an increase of 15 per cent compared with 2011. A further yearly increase of 35 per cent to 29,000 tons in 2013 is expected.

A total of 13,498 tons of farmed fish was traded during the quarter; a decrease of 3 per cent compared with the same quarter last year, the reduction was caused by a decrease of own-produced fish. The volume from external suppliers increased by 22%, which is above growth in the market in the quarter.

The strong consumption growth of salmon continues and exports from Norway have increased by 23 per cent so far this year. The market situation ahead is regarded as positive due to continued strong demand for salmon in most markets. Simultaneously, there will be an increase in the global supply of salmon in the fourth quarter, but considerably less growth than seen in first three quarters of the year. The growth from Norway will be limited, while growth is still expected from Chile. An important assumption for the positive market view is that export to the Russian market will develop normally without any major trade barriers.