Bakkafrost invests £360m in future

BAKKAFROST, the big Faroese salmon farming company, today unveiled plans to invest at least three billion Danish kroners (about £360 million) in its operations over the next five years.
The announcement came as the company announced its results for the second quarter, which were described by CEO Regin Jacobsen as good despite a fall in the price of salmon during the period.
The company plans to construct a new hatchery in Suðuroy for large smolt production, with building due to start in early 2019.
Its investments in its smolt operation over the next five years will be around DKK 1 billion overall, partly to support the large smolt strategy for the new farming areas.
The group also intends on building a biogas plant as part of its 2020 Healthy Living Plan.
Bakkafrost delivered a total operating EBIT of DKK 407.9 million in the three months between April and June.
Harvested volumes totalled 12,900 tonnes gutted weight, compared with 18,400 tonnes in the same period last year. The company expects to harvest 49,000 tonnes for the entire year.
It expects to release 13.9 million smolts in 2018, compared with 9.9 million smolts in 2017 and 11.7 million smolts released in 2016.
The farming segment made an operational EBIT of DKK 393.2 million. The salmon spot prices increased in Q2 2018, compared to the previous quarter.
The price increase had a positive effect on the operational EBIT in the farming segment. The VAP segment made an operational EBIT of DKK -16.9 million. The EBITDA for the fish meal, oil and feed segment was DKK 66.0 million.
The group overall delivered a profit for Q2 2018 of DKK 338.8 million (DKK 398.1 million in Q2 2017). But for the 2018 half year, the profit was DKK 611.1 million, compared to DKK 477.1 million in the first six months of 2017.
Turning to Bakkafrost’s investment plans, Jacobsen said: ‘Bakkafrost has in recent years made large investments to develop the company and now we are pleased to announce a new investment plan for the period from 2018 to 2022.
‘Bakkafrost expects to make investments of around DKK three billion during this period. The salmon farming business has developed dramatically since it started in the Faroe Islands.
‘We foresee great opportunities for development in the future and to be able to transfer these opportunities into realities, large investments are needed.’
He said the investment will be designed to reinforce Bakkafrost’s integrated business model, to minimise biological risk, increase efficiency and create sustainable organic growth. At least DKK 1.3 billion will be spent on expanding farming operations.
Bakkafrost has, through its recently established subsidiary Bakkafrost US, signed an agreement to acquire the business and assets in North Landing, a US salmon importer focusing on the east coast. It has a sales office, handling and processing facilities in Clifton, New Jersey.
Jacobsen said that through this acquisition the company will have better market access and better abilities to serve its customers in the US market.
Picture: Bakkafrost CEO Regin Jacobsen