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2017-05-10 06:30 CEST
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SalMar - Results for the first quarter 2017

RECORD OPERATIONAL EBIT PER KG DUE TO BETTER PERFORMANCE WITHIN FARMING AND SALES

SalMar achieved an Operational EBIT of NOK 25.50 per kg in the first quarter 2017, the highest Operational EBIT per kg in the Group's history.

"In the first quarter 2017, SalMar has posted its strongest ever Operational EBIT per kg. This record result is attributable to continued high salmon prices, lower production costs for the harvested biomass and a higher average price on the overall contract portfolio," says SalMar's CEO Trond Williksen.

"The segments have delivered satisfactory results, and SalMar continues its systematic efforts to strengthen its preparedness for and capacity to deal with the salmon lice situation," Mr Williksen continues. "SalMar's combined non-medicinal delousing capacity has been enhanced, and the company is working continuously to improve its routines and level of competence. The aquaculture sector is undergoing considerable changes, and the potential for further growth is substantial. SalMar acknowledges that such growth must be sustainable from an environmental, social and financial point of view, and we are now better equipped to contribute to this end."

SalMar generated gross operating revenues of just over NOK 2.4 billion in the first quarter 2017, up from around NOK 2.0 billion in the corresponding period last year. The Group harvested 26,300 tonnes of salmon, 1,000 tonnes less than in the same period in 2016. Operational EBIT came to NOK 670.7 million, up from NOK 566.5 million in the first quarter last year.

In the first quarter 2017, Fish Farming Central Norway harvested fish from sites with a better biological performance than was the case in the previous quarter. This contributed to a slightly higher average weight and lower production costs. Despite lower lice numbers at the close of the period than in the first quarter last year, the situation in Central Norway is still regarded as challenging. In the first quarter 2017, some stocks were harvested prematurely out of consideration for fish welfare. New delousing equipment, better routines and increased competence have strengthened the company's preparedness and response capability. SalMar is now well equipped to deal with the situation going forward.

The biological situation for Fish Farming Northern Norway remains good. Despite seasonally lower sea temperatures, the growth rate has been satisfactory, and the harvested volume had a good average weight. Like Fish Farming Central Norway, the segment has invested in delousing equipment to strengthen its ability to respond to any future rise in lice numbers.

Sales and Processing performed much better in the first quarter 2017 than in the previous quarter. The sales business achieved record-high prices in the quarter. However, the segment's Operational EBIT was still negative, since 60 per cent of the volume was sold under contract at prices below the average spot price in the period. Nevertheless, contract losses were substantially lower than in the previous quarter. The improvement is due to a combination of lower market prices and higher contract prices. Although harvesting and processing activities continue to be negatively affected by the biological situation in Central Norway, high harvested volumes have contributed to good capacity utilisation and efficient operations during the period.

Based on estimates of the standing biomass at the close of the quarter, the global supply of Atlantic salmon is expected to grow by 3 per cent in 2017 as a whole. SalMar continues to experience strong demand in the groups core markets.

For 2017 as a whole, SalMar expects to harvest 131,000 tonnes in Norway, up from 115,600 tonnes in 2016. Norskott Havbruk (Scottish Seafarms) forecast to harvest 30,000 tonnes, while Arnarlax is expected to harvest 10,000 tonnes.

The complete report for the first quarter 2017 is attached.

For further information, please contact:
CEO Trond Williksen
Tel: + 47 916 30 173
Email: trond.williksen@salmar.no

CFO Trond Tuvstein
Tel: + 47 918 53 139
Email: trond.tuvstein@salmar.no

See also www.salmar.no for more information about the company.

This information is subject to the disclosure requirements stipulated in section 5-12 of the Norwegian Securities Trading Act.


HUG#2103156