Net loss: Biological problems including micro-jellyfish and amoebic gill disease led to more harvesting, lower average weights, and an operating loss for Scottish Sea Farms in a difficult fourth quarter.

Scottish Sea Farms made £10.4m operating loss in Q4 2022

Salmon producer has also cut harvest target for current year


Salmon farmer Scottish Sea Farms (SSF) made an operating loss of NOK 128 million (£10.4 m) in the fourth quarter of last year, co-owner Lerøy Seafood Group reported today.

This compares with a loss of NOK 29 m made by SSF in the same quarter of 2021, and occurred despite higher revenues of NOK 693 m (Q4 2021: NOK 344 m).

SSF made an operating loss of NOK 17.5 per kilo in Q4 2022, three times the loss of NOK 5.8 made in Q4 2021.

Like other salmon farmers in Scotland, SSF had a tough second half to last year.

Jellyfish and AGD

SSF’s results were negatively impacted with issues with micro-jellyfish and amoebic gill disease (AGD), and there was high mortality cost in Q4/22. Biological issues meant that the company harvested 7,317 gutted weight tonnes of fish (Q4 2021: 4,903 gwt) but the average harvest weight was low. Expected harvest volume has been reduced to 37,000 gwt in 2023.

“It has been an extremely difficult quarter for (SSF holding company) Norskott Havbruk, with challenging biology,” said Lerøy in its Q4 2022 report.

Lerøy, which owns Norskott Havbruk 50/50 with fellow Norwegian salmon farmer SalMar, posted record revenue of NOK 26.6 billion in 2022, reflecting a year of high prices, driven by strong demand for seafood.

Operating profit before fair value adjustments was NOK 3.195 bn compared to NOK 2.518 bn in 2021.

EBIT before fair value adjustments in Q4 2022 was NOK 800 m, compared with NOK 902 m in the same period of 2021. The decrease was attributed to lower earnings for Lerøy’s wild catch division because of lower catch volumes, as well as lower margins in the value-added products and sales division than in Q4 2021.

Higher margins

Operating profit before fair value adjustment for the company’s fish farming operations in Norway was NOK 774 m in Q4 2022, compared with NOK 702 m in Q4 2021. The segment harvested 53,000 gwt during the quarter, up 4% on Q4 2021.

EBIT per kg in farming increased from NOK 13.7 per kg in Q4 2021 to NOK 14.5 per kg in Q4 2022.

The company reported healthy performance in its Lerøy Aurora (northern Norway) region, with more challenging biology in Lerøy Sjøtroll (south) and Lerøy Midt (central Norway).

Lerøy harvested 174,600 gwt of salmon and trout in Norway last year, less than the 186,600 gwt harvest in 2021. The company is guiding for 175,000 gwt this year and is targeting annual harvests of 195,000 gwt in Norway in 2024 and 205,000 gwt in 2025.