SalMar's Ocean Farm 1 salmon pen. Since this photo was taken the offshore farm has been modified and is being used for a third production cycle.

SalMar made operating profit of £142m in Q1


Scottish Sea Farms co-owner SalMar made an operating profit of NOK 1.884 billion (£142 million) in the first quarter of this year and harvested 42,000 gutted weight tonnes of salmon in Norway and 6,600 gwt in Iceland.

SalMar’s acquisition of Norwegian fish farmers NTS, NRS and SalmoNor last year made it the world’s second largest salmon farmer, with an expected 2023 harvest of 243,000 gwt in Norway and 16,000 gwt in Iceland. It will also benefit from its half share of the 37,000 gwt of salmon expected to be harvested by Scottish Sea Farms.

In its Q1 2023 report, SalMar said limited supply growth drove the price of Atlantic salmon to record heights and resulted in solid profits for the company. But chief executive Frode Arntsen also pointed out other achievements which he said are more important when assessing the company’s performance and position, and its capacity for growth.

An exemplary job

“Amid great political uncertainty, our employees have done an exemplary job in combining the businesses of SalMar, NTS, NRS and SalmoNor, and capturing synergies,” said Arntsen.

By Q1 2023, NOK 425m in recurring annual synergies had already been captured, representing 63% of the previously announced goal of NOK 671m.

“At the same time, great operational performance has been achieved across our business, within farming as well as in sales and industry, in Iceland and in Scotland. That is telling for the quality and commitment of the people in our company.”

The company once again criticised the Norwegian government’s proposed 35% “resource rent tax” on salmon and trout farming, which will raise the tax on profits from 22% to 57% and will be backdated to the start of 2023.

“No other country has imposed anything even vaguely resembling this on a part of its food production sector, including seafood,” stated the company.

Major investments shelved

“On this basis, SalMar has found it necessary to shelve all major new investments in Norway going forward. The design and level of the tax proposal will impact large parts of the coastal business community, severely curtailing investments in land-based industry activities in particular.

“The Norwegian government’s new calculations underline the massive scale of the confiscation of investment capital that the proposal will entail. This will sharply reduce opportunities to finance future industrial projects and job creation in Norway, with investments in other countries being correspondingly favoured. The Storting’s (Parliament’s) decision with respect to the tax proposal will, in other words, have substantial ramifications for the Norwegian aquaculture and industrial sectors in the time ahead. As the country’s highest decision-making authority, the Storting, and the Finance Committee on its behalf, therefore shoulder a heavy national responsibility as they embark on their consideration of this proposal.”

Ocean Farm 1

SalMar reported that its offshore Ocean Farm 1 unit, which has been undergoing modifications, was successfully transported to Frohavet in early March. The third production cycle commenced early May. The planned harvest is scheduled for early 2024.

“There is a large potential for future value creation and volume growth for offshore operations. However, as a consequence of the proposed resource rent tax, the timeline for new units has been delayed,” said the company.

SalMar also reported that several parties had expressed an interest in possibly buying the company’s majority stake in Frøy, which provides wellboat and workboat services to salmon farmers in Norway.