Faroese strike hits Bakkafrost hard but Scotland producing higher profits

A long-running general workers strike in the Faroe Islands has proved costly for the salmon farmer Bakkafrost.

The company said the action, which took place in the Spring this year, severely impacted on the second quarter (April to June) results. This was partly because the planned harvest had to be delayed until after the strike, when the salmon market experienced a substantial price drop.

But Bakkafrost also hailed major progress in Scotland, resulting in increased revenues and profits.

As a result of the month-long strike, Bakkafrost harvested 4,000 tonnes post-strike at much lower prices and lower than planned harvest volumes for the quarter.

CEO Regin Jacobsen said he was not satisfied with the financial performance during that period, but was very happy with the company’s current operational position in both Scotland and the Faroes.

Bakkafrost produced much higher revenues and profit in Scotland. Sales totalled 880 million Danish kroner (DKK ) or £100m against DKK 587m (£66.7m) last year, while the operational EBIT or profit was DKK 113m (£12m) against DKK 71m (£8m) last year.

Faroe Islands revenues totalled DKK 1,187m (£134m) against DKK 1,082m (£123m) in Q2 2023 and the operational EBIT or profit was DKK 275m (£31m), down from DKK 282m (£32m) last year.

Bakkafrost CEO Regin Jacobsen

‘Robust’ growth in Faroes and Scotland

CEO Jacobsen said he was pleased with the current operational position, particularly in the Faroese freshwater division where both efficiency and production of high quality smolt were steadily improving.

An outbreak of infectious salmon anaemia (ISA) in the Faroe Islands had been effectively contained, which underscores the importance of robust farming practices and risk management procedures, he added.

He continued: “We are also pleased with the condition of the biomass in the Faroes and Scotland. Growth is robust; there are no sea lice problems in either location, and gill health in Scotland is well managed.

“Our de-risking strategy for marine farming operations in Scotland has been effective, resulting in significantly fewer biological issues and lower mortality than in previous years.

“With 75% of the planned harvest for the year already completed in Scotland, we have mitigated the risk for Q3 as planned.

“The ramp-up at the Applecross hatchery in Scotland is progressing well after addressing cooling system issues identified in Q1 2024. We anticipate achieving an average smolt weight of over 200 grams in Scotland by Q4 2024.”

Bakkafrost also confirmed its decision to close the Marybank processing plant in Stornoway, Isle of Lewis, moving production to Cairndow.

Bakkafrost Scotland farm, Loch Roag, Lewis