News from fishfarmingxpert.com

Bakkafrost a continuing strong profitability The Bakkafrost Group delivered a total operating EBIT of DKK 105.0 million in first quarter of 2013. The Bakkafrost Group delivered a total operating EBIT of DKK 105.0 million. The combined farming and VAP segment made an operational EBIT of DKK 101.3 million. The increased spot prices during Q1 have had a positive effect on the result for the farming segment, which had an operating EBIT of DKK 124.5 million. The VAP segment on the other hand had an operating loss of DKK -23.2 million due to contracts prices that do not reflect the current market situation. The EBITDA for the feed segment was DKK 24.8 million.

Commenting on the results, CEO Regin Jacobsen said: “We are satisfied with the result for Q1 2013. Our Farming operation delivers a continuing strong performance, while we, as we could expect with steep increasing spot prices, have losses in the VAP segment. The market for salmon has been strong in the first months of 2013 and the outlook for 2013 is good, as the increase in the supply is estimated to be limited. “

The Group made a profit for the quarter of DKK 67.5 million (DKK 16.4 million). The total harvested volumes in Q1 2013 were 8,296 tonnes gutted weight (11,348 tgw). The reason for the decrease in the harvested volumes year on year is that the harvested profile is more backend loaded in 2013 compared to 2012. Bakkafrost transferred 2.1 million smolts in Q1 2013 (2.6 million), which is in line with the company’s plans.

The combined farming and VAP segment made an operational EBIT of DKK 101.3 million (DKK 60.3 million) in Q1 2013. This corresponds to an Operational EBIT/kg for the combined farming and VAP segment of DKK 12.21 (NOK 12.16) in Q1 2013, compared to DKK 5.31 (NOK 5.42) in Q1 2012. The salmon prices in Q1 2013 have been stronger than in Q1 2012 and thus higher margins.

The farming segment made an operational EBIT of DKK 124.5 million (DKK 48.8 million). The improved result is due to increased sales prices in Q1 2013, compared to Q1 2012, as the harvested volumes are lower this year. The VAP segment made an operational EBIT of DKK -23.2 million (11.5 million). The reason for the loss in Q1 2013 was the sharp increase in the salmon price during Q1 2013, while the contract prices were based on the price level and outlook in the autumn of 2012.

The third segment - fishmeal, oil and feed - made an operational EBITDA of DKK 24.8 million (DKK 11.1 million) in Q1 2013. The increase in the EBITDA is due to improved prices on the market and increase in production of own fishmeal and fish oil. For the sale of feed, Q1 is normally a low season quarter, as the see temperature in the Faroes is at its lowest during the year. On the other hand the production of fishmeal and fish oil can be high due to the season for fishing different species.

The Bakkafrost Group had a net interest bearing debt at the end of Q1 2013 amounting to DKK 775.2 million (DKK 806.9 million at year-end 2012) and had undrawn credit facilities of DKK 652.8 million, of which DKK 15.0 million are restricted. Bakkafrost’s equity ratio is 48% compared to 49% at the end of 2012. The cash flow from operations in Q1 2013 was DKK 26.7 million (DKK 33.2 million). The Cash flow from operations was aggravated by primarily increased inventory amounting to DKK 100.3 million.

The cash flow from investment activities in Q1 2013 amounted to DKK -28.6 million (DKK -17.0 million). The amount relates to investments in fixed assets amounting to DKK 22.3 million and a financial investment amounting to DKK 6.3 million. Cash flow from financing activities totalled DKK 100.8 million in Q1 2013 (DKK 6.1 million). The short-term debt was increased by DKK 50.4 million, and changes in financing of associated companies contributed positively with DKK 49.1 million. Net change in cash flow in Q1 2013 amounted to DKK 98.9 million (DKK 17.7 million).

At the end of Q1 2013 Bakkafrost had unused credit facilities of DKK 652.8 million of which DKK 15.0 million is restricted On 14 February 2013 Bakkafrost issued unsecured bonds at a total nominal value of NOK 500,000,000, the disbursement date was 14 February 2013. The bonds were listed on the market on 3 May 2013. The interest rate is NIBOR 3 Months plus a margin of 4.15 %. The bonds are measured at fair value at initial recognition. The bonds mature five years from the issue date at their nominal value.

Farming: The operating revenue for Bakkafrost’s farming segment was DKK 425.0 million in Q1 2013 (DKK 312.5 million). Operational EBIT, which is EBIT before fair value adjustments on biological assets, amounted to DKK 124.5 million in Q1 2013 (DKK 48.8 million). Operational EBIT/kg for the farming segment was DKK 15.01 (NOK 14.95) in Q1 2013, compared to DKK 4.30 (NOK 4.38) in Q1 2012. The salmon prices in Q1 2013 have been stronger than in Q1 2012 and thus higher margins.

Value Added Products (VAP):

The operating revenue for the value added segment amounted to DKK 147.7 million in Q1 2013 (DKK 121.5 million in Q1 2012). This is an increase in the revenue of 22%, while the volumes that went for VAP products only increased by 7%. Operational EBIT amounted to DKK -23.2 million in Q1 2013 (DKK 11.5 million), corresponding to an operational EBIT of DKK -5.46 (NOK -5.44) per kg gutted weight in Q1 2013 (DKK 2.89 (NOK 2.95) per kg gutted weight). The decrease in the operational EBIT margins is due to higher salmon spot prices year on year. The reason is that the VAP segment acquires its raw material (fresh salmon) at spot prices each week.

Fishmeal, Fish Oil and Fish Feed: The operating revenue for the fishmeal, fish oil and fish feed segment amounted to DKK 157.5 million (DKK 150.1 million) in Q1 2013 of which DKK 116.4 million represents sales to Bakkafrost’s farming segment corresponding to 73.9% (69.3%). Operational EBITDA was DKK 24.8 million (DKK 11.1 million) in Q1 2013, and the operational EBITDA margin was 15.8% (7.4%). Sales of feed amounted to 14,906 tonnes in Q1 2013, of which the farming segment internally used 10,991 tonnes.