Poor quarter for NRS

The result is considerably  influenced by  65 per cent of the volume being harvested in June when prices were at their lowest in the quarter and losses on fixed price contracts, as well as doubtful receivables related to customers in Ukraine and Russia of MNOK 6.9.

Profit before tax was MNOK 73.8, after a gain on financial assets of MNOK 57.5. Return on capital employed the last four quarters was 24.8 per cent.

Operational cash flow for the quarter was MNOK 48.6. As a result of paying a dividend of MNOK 95.4 the Group's net interest bearing debt increased by MNOK 83 to MNOK 450 at the end of the second quarter of 2014  The equity is MNOK 847 and the equity ratio 42.8 per cent.

Region North posted an operational EBIT of MNOK 25.2 in the quarter, compared with MNOK 66.2 in the corresponding quarter last year. Operational EBIT per kg gutted weight from farming was NOK 8.85 in the quarter, compared with NOK 13.65 in the corresponding quarter last year. The overall lice and health situation in Region North is very good

Region South posted an operational EBIT of MNOK 6.7 in the quarter, compared with MNOK 10.5 in the corresponding quarter last year. Operational EBIT per kg gutted weight from farming was NOK 4.35 in the quarter, compared with NOK 10.03 in the corresponding quarter last year.

5,382 tonnes gutted weight was harvested during the quarter, 21 per cent lower than in the same quarter last year. 3,275 tonnes of the total volume was harvested in Region North and 2,107 tonnes in Region South.

A total of 14,253 tonnes was traded during the quarter; a decrease of 7 per cent compared with the same quarter last year. The sales business achieved an operational EBIT of MNOK -6.3 after posting losses on doubtful receivables of MNOK 4.3 and losses on fixed price contracts of MNOK 2.6 in the quarter.

Estimated harvesting volume for 2014 is 27,600 tonnes, an increase of 10 per cent from 2013. Planned smolt release in 2014 is 8.7 million smolts, which is 14 per cent higher than last year and provides a basis for further growth in harvesting volumes for in the coming year.

In early August, Russia imposed sanctions on Norwegian seafood that in the short term will create market challenges and pressure on prices. On the supply side, the harvest volumes from Norway this summer has been high, which has reduced biomass growth compared to last year. We therefore expect supply growth in the second half of the year will decline relative to the supply growth we have seen in recent months. For the year 2014 the global supply growth is expected to be between 5 and 9 per cent. In the longer term global growth is expected to be low. This provides the basis for a positive market outlook in the long term for the industry, although the market will be more turbulent in the short term.

NRS has been nominated to receive 10 new green licenses to a total price of NOK 146 million, where one of these licenses was finally awarded in the second quarter. This can potentially give NRS a capacity growth of 40 per cent. The criteria for the allocation of the licenses are to establish a production that reduces the extent of sea lice, and reduces the risk of impact on wild salmon as a result of escapes.