Faroese and Scottish salmon producer Bakkafrost benefited from historically high salmon prices and posted an increase in profit, revenue and earnings in its second quarter report, despite a significant drop in harvest volumes.
The group delivered operating earnings before interest and tax of DKK 587 million (€78.9 million/$78.4 million) and made a of DKK 845 million (€113.6 million/$112.9 million) profit, which equates to an increase of 30 percent and 49 percent, respectively, compared to the same period last year.
The group's second quarter revenue rose 3.9 percent, generating DKK 1,684 million (€226.4 million/$225.1 million).
For the first half of 2022, operating revenue amounted to DKK 3,323 million (€446.8 million/$444.1 million) a 15 percent year-on-year increase.
Reduced supply and strong demand for salmon plus food cost inflation pushed prices to an all-time high in the quarter.
Salmon spot prices were 70 percent higher with salmon supply decreasing 6.8 percent, Bakkafrost noted in its report.
The group harvested 43 percent less fish during the second quarter at 19,700 metric tons gutted weight. In the Faroe Islands, where the majority of the group’s operations are, harvests fell 34 percent to 13,100 metric tons, while its Scottish farm volumes fell 60.6 percent to 6,600 metric tons.
Bakkafrost's Scottish operations have faced setbacks, and one farming area in the country is still challenged.
This demonstrates that the biological risks are still high, the company said in the report. Bakkafrost’s strategy to implement large smolt in Scotland is key to reduce the biological risk and to improve biological performance.
While the group's farming segmented posted strong figures, its value added production (VAP) segment faired less well, posting an EBIT loss of DKK 142 million (€-19.1 million/$-19 million).
Its revenue, however, increased 37 percent to DKK 417 million (€56.1 million/$55.7 million).
Bakkafrost's fishmeal, oil and feed business posted a 33 percent increase in operating revenue of DKK 523 million (€70.3 million/$69.8 million).
Bakkafrost is the largest salmon farmer in the Faroe Islands and the second largest salmon farmer in Scotland.
The group is fully integrated and has production of fishmeal, fish oil and salmon feed in the Faroe Islands and primary and secondary processing in the Faroe Islands, Scotland, New Jersey and Denmark.
