Profitable Q3 for Bakkafrost
A high share of VAP contributed significantly to stabilize the margins, in addition to high feed sales.
Bakkafrost harvested 9,243 tonnes salmon compared with 4,048 tonnes in the corresponding quarter in 2010 and obtained revenue of DKK 369 million (DKK 178 million). Net earnings in the period were DKK 160 million, compared with DKK 66 million in the corresponding quarter last year.
The operational EBIT/kg in the quarter was NOK 6.08 (Farming and VAP) and 14.4% EBITDA margin in the fish meal- oil and feed segment. The first nine months of 2011, Bakkafrost had operating revenue of DKK 924 million (DKK 568 million). The operating EBIT was DKK 289 million (DKK 156 million), and the profit the first nine months in 2011 was DKK 238 million (DKK 145 million).
Bakkafrost harvested 22.795 tonnes salmon the first nine months in 2011, and transferred 6.5 million smolt. The total harvest for 2011 is expected to reach 38,000 tonnes and a smolt transfer on 10 million smolt. Feed sales the first nine months of 2011 were 60,819 tonnes and is expected to reach 80,000 tonnes for the full year.
On October 28th 2011 Bakkafrost signed a term sheet for a new loan agreement with its bank syndicate on DKK 1,100 million. By end of the third quarter 2011, Bakkafrost had a total balance on DKK 2.4 billion, and a equity ratio of 41%. Commenting on the results, CEO Regin Jacobsen says: "We are satisfied with the results, as all segments have positive margins in a challenging quarter, where salmon prices decreased faster than anticipated. The long-term contracts for VAP products proved our strategy. With the additional platform from the acquisition of Havsbrún, Bakkafrost has further strengthened its competitive advantages in the market. Already in this quarter these have started to materialise with the solid result in the fish-meal, -oil and -feed segment."
Outlook The salmon prices are significantly reduced during the third quarter. The margin in the industry is expected to be lower than before. Bakkafrost expects to harvest around 14,000 tonnes in the last quarter in 2011 and reach around 38,000 tonnes for the full year. The reduced prices are expected to have a positive impact on the market. With the acquisition of Havsbrún earlier this year,
Bakkafrost also purchased another VAP factory, which has not been in production during 2011. This factory has been renovated and new equipment installed, and Bakkafrost expects to start production early 2012. Increased harvest of own salmon in 2012 gives Bakkafrost good opportunities to increase the sale of VAP products to our customers. The total harvest in 2012 is expected to be between 46,000 and 49,000 tonnes.
