NRS says it is important that ongoing investment in its Arctic Offshore Farming project, pictured, is implemented. Image: NRS.
NRS says it is important that ongoing investment in its Arctic Offshore Farming project, pictured, is implemented. Image: NRS.

Covid-19 causes salmon farmer to halve dividend

Norway Royal Salmon has cut its proposed shareholder dividend for 2019 from NOK 10 per share to NOK 5 to ensure its plans for the future remain on course in the face of the Covid-19 pandemic.

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NRS, which has licences to farm 35,000 tonnes of salmon in Troms and Finnmark, and owns stakes in other salmon farms in Norway and Iceland, said the pandemic had significantly impacted the logistics and market for salmon, but that its productions had so far not been significantly impacted.

“This situation creates significant unpredictability and uncertainty both in terms of consequences and duration,” the company said in a statement.

Thorough assessment

“The Board of Directors and the management of NRS have made a thorough assessment and concluded that it is most responsible to the shareholders, employees and the community to propose a reduced dividend at the next Annual General Meeting.

“The board of NRS is committed to take the necessary actions to secure the company in the future, operationally, strategically and financially. NRS now has the highest priority for efforts to implement the necessary measures in a situation of great uncertainty. It is important for NRS’s development and future profitability that the ongoing investment projects with a new smolt facility and Arctic Offshore Farming be implemented.”

Strong balance sheet

NRS said it had a strong balance sheet and low debt ratio, with unused credit facilities of NOK 2 billion and bank deposits of NOK 152 million at the end of 2019.

“The Board’s proposed dividend is therefore solely linked to the national and global uncertainty created by the Covid-19 pandemic and does not entail a change in the company’s dividend policy,” NRS said.

The company’s decision follows that of fellow Norwegian salmon farmer SalMar to scrap its £187m dividend pay-out for 2019, and a move by Faroese salmon farmer Bakkafrost to delay its 2019 dividend proposition until August, “at which time the Board of Directors expect the level of uncertainty (caused by Covid-19) to have reduced”.