NRS results were dented by an ISA outbreak in the northern region, said NRS chief executive Charles Høstlund. Photo: Therese Soltveit

ISA costs hurt Norway Royal Salmon's bottom line

Norway Royal Salmon (NRS) harvested more fish and made a bigger operational EBIT in the second quarter of 2018 than in the same period the year before, but profits were hit by an outbreak of ISA (infectious salmon anaemia) at one site.

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“Costs related to ISA had a significant impact on the result for the quarter and estimated volume for 2018,” said chief executive Charles Høstlund in a report to the stock market.

Operational EBIT was NOK181 million (£16.8m) for the second quarter 2018, up from NOK135m in Q2 1017. But EBIT per kg dropped to NOK24.39 (£2.27), compared to NOK30.70 (£2.86) in Q2 2017.

NRS harvested 8,773 tonnes gutted weight in the quarter, which is 68% higher than in the same quarter last year. 6,365 tonnes of the total volume were harvested in Region North, where NRS has most of its farms, and 2,407 tonnes in Region South. Estimated harvest volume is 36,000 tonnes for 2018, an increase of 13% from 2017.

Major investments

Net interest-bearing debt decreased in the quarter by NOK33m to NOK413m. The company’s equity at the end of the quarter was NOK2.1 billion, which equates an equity ratio of 52%. Return on capital employed for the last four quarters is 40%.

“NRS purchased 800 tonnes of maximum allowed biomass in the north for NOK132m,” said Høstlund. “Both the project for construction of a new smolt facility and Arctic Offshore Farming are going according to plan. These are major investments that will have significant effects and increase the Group’s potential.”

NRS and Aker Solutions have been awarded 7.68 development licences (5,990 tonnes) for the development of Arctic Offshore Farming, a semi-submersible offshore cage built out of steel. The licences will allow two cages to be constructed.