Iceland salmon farmer ends year on positive note

THE Icelandic salmon farmer Arnarlax, which lost stock worth £2.5 million in severe storms two weeks ago, has posted significantly increased harvests and profits for the final quarter of 2019.

The company, in which Norway’s SalMar has a majority stake, made an operational EBIT of NOK 27 million.

This was up from NOK 21.9 million in the previous quarter and a big improvement on the NOK 10 million loss in the same quarter in 2018. It also achieved a 46 per cent increase in its harvest throughout 2019.

The Arnarlax report said: ‘We ended 2019 with yet another positive quarter, driven by good biological performance and better capacity utilisation at the harvesting plant.

‘For the year as a whole, the company achieved a 46 per cent increase in the volume harvested and posted an EBIT per kg of NOK 10.21 compared with an EBIT per kg of minus NOK-11.82 in 2018.

‘At the same time, there is still room for improvement throughout the value chain, particularly with respect to distribution costs.’

Arnarlax said it expects a higher harvested volume but also higher costs in the first quarter of this year, ‘due to the harvesting out of the 2018 generation following increased mortality in a demanding period caused by winter storms at the start of the year’.

The Sales and Processing segment made an operating profit of NOK 7.5 million in Q4 2019, down from NOK 79.4 million 12 months earlier.

It added: ‘The decrease is partly attributable to lower capacity utilisation at the harvesting plant as a result of a lower volume harvested.

‘Profits were also affected by a lower positive contribution from fixed price contracts resulting from a rising salmon spot price through the quarter.

‘In the fourth quarter 2019, contracts covered 20 per cent of the volume. For the first quarter 2020 and for the year as a whole, the contract rate stands at 30 per cent and 20 per cent, respectively.’

Arnarlax is Iceland’s largest producer of farmed salmon.