The SalMar Group posted an operating profit before fair value adjustment of the biomass of NOK 152.7 million in the first quarter 2010. This is an increase of 86 per cent compared with the same quarter in 2009. All segments (SalMar Central Norway, SalMar Northern Norway and Scottish Sea Farms) achieved strong margins during the quarter. The result is due to a combination of record-high salmon prices in the first quarter and continued satisfactory development within the biomass.
The SalMar Group generated gross operating revenues of NOK 617.9 million in the first quarter 2010, compared with NOK 476.2 million in the corresponding quarter in 2009. The Group made an operating profit before fair value adjustment of the biomass of NOK 152.7 million, compared with NOK 82.1 million in the corresponding quarter in 2009. This corresponds to an operating profit per kg gutted weight of NOK 13.53 for SalMar Central Norway and NOK 11.09 for SalMar Northern Norway.
Commenting on the results CEO Leif Inge Nordhammer said:
"The first quarter 2010 was a record first quarter for the SalMar Group. All segments posted good profitability on the back of a strong salmon market and satisfactory development within the biomass. SalMar's strategy for dealing with sea lice has been effective and we have the lice situation well in hand at all our sites.
"The salmon market is currently strong, and so far in 2010 both salmon prices and export volumes have been at record levels for the time of year. The global supply of salmon is expected to fall by around 5 per cent in 2010. Combined with a continued strong demand in our most important markets, this should result in salmon prices stabilising at a relatively high level for a long time to come."
SalMar owns 50 per cent of Norskott Havbruk AS, which has fish farming operations in mainland Scotland, the Orkneys and Shetland. The business generated gross operating revenues of NOK 285.4 million in the first quarter 2010 and made an operating profit before fair value adjustment of the biomass of NOK 72.6 million, up from NOK 32.2 million in the corresponding quarter in 2009. The margin per kg gutted weight was NOK 8.75 for the quarter.
SalMar's key figure for profit performance under IFRS is EBIT (operating profit) before fair value adjustment of the biomass. Adjustment of the fair value of the biomass results from the requirement to value biological assets (the biomass) at fair value instead of cost price. SalMar reports EBIT before fair value adjustment of the biomass in order to show the underlying performance of its operations during the period.
The SalMar Group, including its 50 per cent share of Norskott Havbruk AS, harvested around 15,900 tonnes gutted weight in the first quarter 2010, divided between 9,600 tonnes in central Norway, 2,100 tonnes in northern Norway and 4,200 tonnes in Scotland/Orkney/Shetland.
Despite the low temperatures in the seas around parts of Norway this winter, SalMar is maintaining its overall harvesting forecast for 2010 of around 85,000 tonnes, divided between 56,000 tonnes for SalMar Central Norway, 17,000 tonnes for SalMar Northern Norway, while Norskott Havbruk aims to harvest some 24,000 tonnes, with SalMar's 50 per cent coming to 12,000 tonnes.
SalMar considers the immediate outlook to be very bright. Despite record high salmon prices for the time of year, the company is experiencing strong demand. In SalMar's opinion this, combined with an anticipated reduction in exports of Atlantic salmon from Chile, gives grounds to expect good salmon prices for a long time to come. At the same time, the Norwegian fish farming industry has considerable growth potential.
For further information, please contact:
Leif Inge Nordhammer, CEO, +47 916 85 250
Roar Husby CFO, +47 982 06 974
See also the company's website: www.salmar.no
This information is subject of the disclosure requirements acc. to ยง5-12 vphl (Norwegian Securities Trading Act)