The second quarter was characterized by a relaxation in lockdowns in many of the farmed salmon industry's key markets. Increased demand drove up prices as the foodservice industry was allowed to reopen and for many of the world's salmon farmers this brought welcome relief from a stressful reconfiguration of their supply chains since the onset of the COVID pandemic.
It was this recovery in foodservice that was largely reflected in salmon farmer's second quarter earnings before interest, and taxes (EBIT) per kilo.
Most companies reported better margins than in the same period last year, the first full financial quarter operating under strict measures around the world aimed at thwarting the spread of the COVID-19 virus.
Bakkafrost's Faroe Islands operations posted a more than twofold increase in EBIT/kilo, recording the highest EBIT per kilo of all the leading producers.
Mowi's northern region operations saw a much better quarter than a year earlier with EBIT per kilo 58 percent higher, while the company's southern division recorded a fivefold increase.
Affiliates of Norway Royal Salmon, the target of a takeover attempt by NTS, saw its EBIT per kilo double in the second quarter, although the company's northern division bucked the trend, suffering a reverse from a year earlier.
While others enjoyed more moderate EBIT per kilo increases, not everyone enjoyed a better second quarter.
However, the group is expecting to make a gradual recovery.
A halving of volumes at Mowi's Irish operations was reflected in an EBIT per kilo driven by higher costs, which overshadowed an improvement in prices.
Although narrowing losses, the operations of Mowi in Canada and Grieg Seafood Finnmark in Norway remained in negative territory.
Mowi Canada East's results were affected by infectious salmon anemia (ISA) in the second quarter, with incident-based mortality loss costing €1.7 million ($2 million).
Australia's Huon Aquaculture, the subject of a vigorous takeover bid by Brazilian meat behemoth JBS, posted a 75 percent decline in EBIT per kilo during the first six months of its financial year amid lower salmon prices and higher airfreight costs.
"We see that there is a large spread between the different regions. In northern Norway, we still see traces of the repercussions after a very cold winter," SEB Markets analyst Bent Rolland said.
Low sea temperatures caused problems with winter sores, leading to both higher costs and reduced prices for some because fish were downgraded and processed at lower weights.
"The hotel and restaurant market is back, and demand has increased significantly," Rolland said.
But improved earnings do not signal the end of salmon producers' problems, the analyst noted.
"Climate change will affect salmon production, and farmers will have to adapt to new weather types. It can be more challenging to produce salmon," Rolland said.
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