Tax forces Måsøval to axe semi submersible project

The Norwegian fish farming company Måsøval has cancelled a major semi-submersible salmon farm project because of the ground rent (or “resource rent”) tax.

Known as Aqua Semi, the closed roof scheme was designed to open up new areas in salmon farming, reduce lice and disease.

But Måsøval, which put the project on hold last year, has just said in its second quarter report that the project is no longer economically viable because of the new tax, which was voted in by the Norwegian Parliament earlier this year.

The company’s EBIT or operating profit is also affected by a NOK 45 million (£3.3m) write down for Aqua Semi.

Måsøval said that is 2019 it received four development licences which it intended to introduce a number of benefits against lice and other problems. The development phase was finalised last year.

The statement continued: “The new resource rent tax does not give a tax break for investments in development licences, while introducing a full resource rent tax on profits after the project is finalised and licences converted to regular commercial licences.

“This tax makes the project in its current form economically non-viable.

“Måsøval has therefore decided to cancel the project and take a one-off write-down of the investment with a total of MNOK 45.

“We regret that the resource rent tax cancels an investment that would have led to a better and more sustainable method for fish farming while bringing significant activity to the supplier industry in Norway.”

Meanwhile, the group, which also has salmon farming interests in Iceland, announced operating revenues to almost NOK 805 million (£60m) against NOK 934m (£69m) in Q2 last year.

The group’s operational EBIT in Q2 2023 was NOK 210.5m (£15.6m), down from NOK 500.6m (£37m) a year ago.

The result after tax was a loss of NOK 123.3m (£9.1m) against a profit of NOK 436.2m (£32m) last year.

It said the decrease in revenues was attributable to a lower harvested volume and more downgrading with lower achieved prices compared to the corresponding quarter last year.

The drop in operational EBIT, it added, was caused by higher prices of feed and costs for sea lice treatment on the Spring 2022 generation.

Måsøval is maintaining its harvest guidance of 24,300 tonnes in 2023, with 7,200 tonnes expected in the current quarter.