High-tech project written off due to salmon tax as earnings crash 58 percent

by
Editorial staff

 Masoval has announced it is writing off its high profile Aqua Semi project.

Norwegian salmon producer Masoval recorded a harvest of 7,573 tonnes for the second quarter, of 2023 a 13 percent decline on production in the same quarter last year, according to a report issued by the company on Tuesday.

Operational earnings before interest and taxes (EBIT) declined from NOK 501 million in the same quarter last year to NOK 211 million, a 58 percent decrease.

The company attributed the decrease in revenues to a lower harvested volume and more downgrading with lower salmon prices compared to the corresponding quarter last year.

The decrease in operational EBIT is put down to increased feed prices and the costs for sea lice treatments.

The group reported a profit before tax of NOK 151 million (€13 million) for Q2 2023.

The salmon tax only applies to the production of salmon at sea and not the entire production cycle. The implementation effect of the resource rent tax constitutes a deferred tax on the group’s biomass of NOK 242 million (€21 million).

After calculating the NOK 275 million (€24 million) costs of the salmon tax at a rate of 25 percent and backdated to January, Masoval reported a loss for the period of NOK 123 million (€10 million).

Aqua Semi written off

In 2019, Masoval received four licenses from the Norwegian government to develop the concept Aqua Semi, a 4,000 ton semi-submersible, semi-closed production unit for salmon.

The new technology was designed to open up new areas for salmon farming, while reducing sea lice numbers and disease contagion, improving fish health and lowering operational costs.

The project’s development phase was finalised in 2022 but was put on hold when the salmon tax was first mooted in September that year.

The company has decided to cancel the project and take a one-off write-down of the investment for a total of NOK 45 million (€4 million), it announced in its Q2 earnings report.

“This tax makes the project in its current form economically non-viable,” the company wrote.

“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.”

Masoval is among Norway’s oldest salmon companies and is now run by the third generation of Masovals, brothers Lars and Anders.

The group is maintaining its guiding of 24,300 metric tons for 2023, with 7,200 tons expected in Q3 2023.

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