Solid start for Bakkafrost
Commenting on the results, CEO Regin Jacobsen said: The Q1 2010 result represents, as previously announced, a quarter in which we implemented the change of strategy in the Farming West division, in which we changed to pure salmon production. In the transition period in 1H 2010, this has a negativeimpact on the overall result, and on harvested volumes. We expect, however, from second half of 2010, harvested volumes will start to increase again, which should be reflected in the results following the transition".
The operating revenues amounted to DKK 190.4 million in Q1 2010 (DKK: 185.7 million in proforma 1Q 2009) and represents an increase of 3%, although volumes are reduced by 22%.
The Bakkafrost Group harvested a total of 5,744 tonnes gutted weight in Q1 2010 (7,318 tonnes gutted weight in Q1 2009 merged). Of this, Bakkafrost Farming North contributed 4,983 tonnes and West (former Vestlax) contributed 761 tonnes, as it switches from trout/salmon to pure salmon production.Due to lower smolt releases in 2008 and the switch to pure salmon production in Farming West, the harvested volumes in 1H 2010 will be affected. The total harvested quantities for 2010 and 2011, on average for both years, is still estimated to be around 60,000 tonnes gutted weight.
Farming Segment: Operational EBIT/kg for the farming segment was DKK 9.19 (NOK 10.00) per harvested kg, compared to DKK 4.50 (NOK 5.39) in Q1 2009. Farming North had a calculated Operational EBIT of DKK 10.37 (NOK 11.29), and Farming West had an Operational EBIT of DKK 1.44 (NOK 1.57). The unsatisfying result in Farming West is a result of the trout production in the quarter, which according to the company's strategy is being phased out. The overall increase in the performance of the Group reflects the increase in the salmon price, the xcellent biological situation and improved performance in general. The profit after tax for Q1 2010 was DKK 71.0 million (DKK 17.5 million in proforma Q1 2009) for the farming segment. Value Added Products (VAP) Segment: Operational EBIT for the value added products (VAP), segment, which is EBIT adjusted for provisions for onerous contracts and listing costs, was DKK -0.65 (NOK -0.70) per kg gutted weight (DKK -0.33 (NOK - 0.40) per kg in Q1 2009). The continued increase in the salmon price from 2009 and during Q1 2010 reflects the result from the value added segment. The time lag between the movements in the fresh salmon price and the contract price for value added products leads to a significant negative result when spot market prices increase and a positive result when spot market prices decrease.
