Faorese salmon giant Bakkafrost posted a huge boost in earnings in the fourth quarter of 2019 thanks to large harvests, good prices and healthy contributions from its acquisition of The Scottish Salmon Company (SSC).
Earnings before interest, tax, depreciation and amortization (EBITDA) rocketed 47 percent year-on-year, reaching DKK 415 million (€55.6 million/$60.2 million) from DKK 282 million (€37.8 million/$40.9 million) for the three months to Dec. 31.
Revenues rose further, more than doubling to DKK 1.6 billion (€215.1 million/$232.7 million) from DKK 705 million (€94.5 million/$102.2 million), contributing to a marked difference from Bakkafrost's 2018 fourth quarter profit slump of DKK 7 million (€938,000/$1 million) in losses to DKK 220 million (€29.5 million/$31.9 million) in profit.
The group harvested 17,930 metric tons of salmon in the Faroes in the quarter, an increase of 47 percent over 12,234 and a new fourth quarter record for the producer.
Harvests from newly acquired SSC operations totaled 7,925 metric tons.
Feed sales for the group also rose, hitting 28,398 metric tons, up 15 percent compared to 2018. Around 73 percent of this was sold internally.
Bakkafrost CEO Regin Jacobsen said he was "satisfied" with the results, though he noted that the beginning of the fourth quarter was disrupted by the high supply of smaller fish.
"At the end of the quarter supply pressure shifted to demand-driven growth. Our harvested volumes in the Faroe Islands were the highest ever for a fourth quarter -- with record big fish -- the revenue and operational result was also record high for a fourth quarter."
Jacobsen added that biological performance has been good and that the company's new Strond Hatchery is up-scaling production and contributing significantly to operations from here on out.
The company's VAP segment also performed well.
"2019 has been an eventful year for Bakkafrost," said Jacobsen. "We have made a giant leap into a new geography by the acquisition of The Scottish Salmon Company. This acquisition has increased the scale of our operation significantly and brought us new possibilities to exploit for many years ahead. We are very excited about this but do realize that it will take time before we will really see results of the investments we will do in the Scottish operation."
