PD affects the Salmar results

The supply of salmon grew globally by 29 per cent during the quarter. The market has absorbed this growth at higher prices than in the first quarter. SalMar Central Norway's performance was affected by PD. PD-related harvesting has resulted in higher costs for fish farming operations and affected  InnovaMar's efficiency. The Norwegian Food Safety Authority has now changed its practice with respect to the handling of PD in Sør-Trøndelag, and this will help to avoid the destruction of fish stocks due to PD in the county. In addition about half the volume was harvested in June, when salmon prices were lower than in April and May. Despite this the segment has achieved a margin of NOK 3.49 per kg gutted weight. InnovaMar and the sales division have posted higher earnings during the quarter, and increased activity provides a stronger contribution from this part of the business.

SalMar Northern Norway increased both its volumes and margins compared with the first quarter. A portion of the harvested volume had quality problems, which has affected the price achieved. In this segment, too, a substantial proportion of the volume was harvested in June at lower prices. The segment achieved a margin of NOK 2.31 per kg gutted weight.

The Rauma segment also increased its margins compared with the first quarter. Results in the quarter were affected by the destruction of broodstock due to the presence of ISA. The segment achieved a margin of NOK 2.42 per kg gutted weight.  

The SalMar Group generated gross operating revenues of NOK 836.7 million in the second quarter 2012, compared with NOK 681.7 million in the same quarter in 2011. The Group made an operational EBIT of NOK 59.9 million, compared with NOK 112.0 million in the same quarter last year. SalMar owns 50 per cent of Norskott Havbruk AS, which operates fish farms in

mainland Scotland, the Orkneys and Shetland. The business generated gross operating revenues of NOK 216.8 million in the quarter, and made an operating profit before fair value adjustment of the biomass of NOK 17.2 million. Operating profit per kg gutted weight totalled NOK 2.77 in the quarter. At the close of the quarter SalMar owned 25.2 per cent of P/F Bakkafrost, a listed Faeroe Islands fish farming company. The business made an operational EBIT of NOK 78.9 million in the second quarter. SalMar's share of the profit after tax and fair value adjustment came to NOK 23.1 million. Further, and as announced 27(th) of March 2012, SalMar has entered into TRS agreements foradditional 4.66 per cent of the shares in P / F Bakkafrost.

Commenting on the Group's performance CEO Ynge Myhre said: "Compared with the corresponding quarter last year, and corrected for the fall in market price, the SalMar Group posted higher underlying margins. It is particularly gratifying to note that InnovaMar is performing well in an operationally challenging quarter. There is still room for improvement, and moving forward our attention will be focused on operational efficiency."

The SalMar Group, including its 50 per cent share of Norskott Havbruk AS, harvested 23,390 tonnes gutted weight in the second quarter, with SalMar Central Norway accounting for 12,825 tonnes, SalMar Northern Norway 4,023 tonnes and the Rauma segment 3,430 tonnes, while 3,113 tonnes was harvested in Scotland/Orkneys/Shetland. SalMar expects to harvest some 120,500 tonnes gutted weight in 2012 as a whole, with SalMar Central Norway accounting for 74,000 tonnes, SalMar Northern Norway 21,000 tonnes and the Rauma segment 13,000 tonnes, while Norskott Havbruk aims to harvest some 25,000 tonnes, of which SalMar's 50 per cent share will total approx. 12,500 tonnes. This represents an overall increase of 16 per cent compared with 2011.

SalMar considers the long-term outlook for the Group and the industry as a whole to be good, even though short-term fluctuations must be expected as a result of temporary imbalances between supply and demand in the market. Global market growth in excess of 30 per cent in the first half of 2012 shows that many important markets are capable of consuming more salmon. The increase in the supply of Atlantic salmon in the second half is expected to be far lower than in the first six months of the year. Some 218,000 tonnes (around 70 per cent) of the 305,000 tonne increase in the global supply expected in 2012 as a whole - compared with 2011 - has already gone into the market. SalMar expects the balance between supply and demand, as well as salmon's position as a healthy and competitive foodstuff, will cause the price of salmon over time to stabilise at a level that will provide good earnings for the most efficient fish farming companies.