Record harvest for Faroese farmer

The company delivered a total operating EBIT of DKK 303 million (£29.77m) in Q2, up 43% compared to the same period last year, and this was worth DKK 191 million (£18.76m) after tax. According to Nordea analyst Kolbjørn Giskeødegård, the EBIT figures were 20% higher than predicted and he recommends that shareholders in the group should stick with the company for now.

The group harvested 14,182 tonnes gutted weight, which is a new record for any quarter, although the guidance for harvest volumes for 2015 is unchanged. The farming segment delivered an operational EBIT of DKK 248 million (£24.36m). The VAP segment, which produced 5,064 tonnes, made an operational EBIT of DKK 31 million (£3.05m). The fishmeal, fish oil and feed (FOF) segment delivered an EBITDA of DKK 53 million (£5.21).

Commenting on the result, CEO Regin Jacobsen said: “Bakkafrost harvested over 14,000 tonnes In Q2 2015, which is the highest quarterly harvest ever for Bakkafrost. This together with good operational performance and positive market conditions resulted in a record high operating EBIT in Q2 2015. Bakkafrost’s focus on the operational performance is reflected in the investment of the new wellboat, “Hans á Bakka”. “Hans á Bakka” was delivered in July and started operating in August 2015, which marks a milestone in salmon farming in the Faroe Islands.”

The company released 1.4 million smolts in Q2 2015, which is in line with their smolt release plan.

The good catch of pelagic fish around the Faroe Islands in Q1 2015 continued into Q2 2015. Havsbrún has purchased 86,000 tonnes of raw material in Q2 2015. Havsbrún’s purchase of raw material in first half 2015 amounts to 161,000 tonnes.

Outlook

Farming

Bakkafrost expects to harvest 49,000-51,000 tonnes gutted weight in 2015. Bakkafrost’s forecast for smolt release in 2015 is 10.4 million pieces. The estimates for harvesting volumes and smolt releases is as always dependent on the biological situation.

Value added products (VAP)

Bakkafrost’s long-term strategy is to sell around 40-50% of the harvested volumes of salmon as value added products on fixed price contracts. The contracts last for 6 to 12 months. Bakkafrost has signed contracts covering around 75% of the VAP capacity for the rest of 2015.

Fish oil, -meal and feed (FOF)

The outlook for the production of fishmeal and fish oil has improved as the available raw material for the production has increased. The quotas for catching blue whiting in the North Atlantic have in-creased. With increased quotas, Bakkafrost is optimistic that the raw materials needed for our production of high quality salmon feed will be available.

The group feed division, Havsbrún, expects to sell 73,000 – 77,000 tonnes in 2015. This is a reduction from the previous outlook at 83,000 – 87,000 tonnes, as the sale of fish feed to external customers has been reduced. The expected feed purchase from Bakkafrost’s farming segment in 2015 is unchanged.