Tough quarter for NRS

The company’s Q2 report, which was published today, reveals an operational EBIT of MNOK 19 (£1.47m) and an EBIT per kg of NOK 4.83 (£0.37).

“The second quarter was challenging, high production costs and reduced price achievement in Region North affected the result of the farming operations,” says CEO Charles Høstlund.

Nordea’s Kolbjørn Giskeødegård added: “Unfavourable timing of sales, downgrade of fish and generally high cost (driven mainly by higher feed cost) is their main explanation for this. The 2015 volumes are guided down 1500 tonnes (4-5%), this is mainly an issue related to the low on growing and harvesting in July and August. Overall a disappointing report, placing the company from high end of the company ranking to the low end in Q2. We expect a negative market reaction to these figures today.”

Cash flow from operational activities was MNOK 70 in the quarter. Due to paid dividend of MNOK 65, the Group's net interest bearing debt increased by MNOK 39 to MNOK 625 during the quarter. Equity at the quarter end was MNOK 901, which equates an equity ratio of 38.5 per cent.

Region North

Region North posted an operational EBIT of MNOK 20.9 in the quarter, compared with MNOK 25.2 in the corresponding quarter last year. Operational EBIT per kg gutted weight was NOK 5.68, compared with NOK 7.69 in the corresponding quarter last year. The overall sea lice and health situation at the sites in Region North are good.

Region South

Region South posted an operational EBIT of MNOK 6.3 in the quarter, compared with MNOK 6.7 in the corresponding quarter last year. Operational EBIT per kg gutted weight was NOK 3.23, compared with NOK 3.19 in the corresponding quarter last year. Region South has good control over the sea lice situation, but the costs of sea lice treatment have increased slightly so far this year.

NRS harvested 5 620 tonnes gutted weight during the quarter, 4 per cent more than in the same quarter last year. 3 675 tonnes of the total volume was harvested in Region North and 1 945 tonnes in Region South. Estimated harvesting volume for 2015 is 30 500 tonnes, an increase of 36 per cent from 2014.

16,121 tonnes were traded during the quarter; an increase of 13 per cent compared with the same quarter last year. The sales business achieved an operational EBIT of MNOK 4.8 in the second quarter.

The salmon prices have been under some pressure in the quarter due to the loss of the Russian market. For the second half of 2015 the global supply growth is expected to be between 0 and 3 per cent, and in the longer term, global growth is expected to be low. This provides the basis for a positive market outlook for both the second half of 2015 and in the long term for the industry.

In June the first two NRS sites was certified after the ASC standard (Aquaculture Stewardship Council). NRS is very happy to get its first sites certified by the strictest international environmental standards in the industry. This is a global standard for responsible aquaculture, which together with our green licenses will contribute to reduce the impact on the environment and society.