Improved biological situation boosted SalMar profits

An improved biological situation and strong operations in all the Group’s
segments contributed to lower costs and a strong result for the SalMar Group in
the third quarter 2017. The Group’s Operational EBIT for the period came to NOK
801.3 million, up from NOK 576.3 million in the third quarter last year.

“Strong operations in all segments and an improving biological situation have
enabled SalMar to once again deliver strong financial results, despite a fall in
salmon prices through the quarter,” said SalMar’s CEO Trond Williksen.

“It is particularly pleasing that the steady reduction in costs we have achieved in
recent periods continued in the third quarter, and that the extensive efforts
and substantial investments we have made over time to deal with salmon lice are
now starting to pay off.”

SalMar generated gross operating revenues of NOK 2.7 billion in the third
quarter, up from NOK 2.3 billion in the corresponding period last year. The
Group harvested 34,000 tonnes, compared with 29,600 tonnes in the third quarter
2016. This gave an EBIT per kg of NOK 23.60 in the third quarter, while EBIT per
kg in the second quarter came to NOK 28.12.

Fish Farming Central Norway’s cost per kg biomass harvested fell for the third
successive quarter. The strong performance is the result of good underlying
operations and the company’s systematic efforts to strengthen its preparedness,
capacity and expertise with regard to managing biological challenges. The
segment’s biological situation has improved through the quarter, and costs are
expected to hold steady in the fourth quarter.

The biological situation for Fish Farming Northern Norway is good. Combined with
strong operations, this has resulted in a high level of output from the
generations that have been harvested during the quarter. Furthermore, it has led
to a fall in costs from the previous quarter. As in previous years, SalMar
experienced a slight increase in lice numbers in the third quarter. However,
SalMar is well equipped to meet any biological challenges, and costs are
expected to hold steady in the coming quarter.

The Sales and Processing segment posted an operating profit of NOK 46.2 million
in the quarter. High capacity utilisation in the secondary processing business,
positive contributions from contracts and good dispositions in the spot market
all resulted in a substantial improvement in the segment’s financial results.
Contract sales accounted for 45 per cent of the volume in the quarter. The
contract rate in the fourth quarter 2017 will be around 40 per cent, with price
levels similar to the first half of 2017.

SalMar expects to harvest around 134,000 tonnes in Norway in 2017 as a whole
(Fish Farming Central Norway, 86,000 tonnes; Fish Farming Northern Norway,
48,000 tonnes). Norskott Havbruk (Scottish Seafarms) and Arnarlax are expected
to harvest 32,000 tonnes and 9 500 tonnes respectively.

SalMar expects to harvest around 143,000 tonnes in Norway in 2018 as a whole.
Norskott Havbruk (Scottish Seafarms) and Arnarlax expect to harvest 27,000
tonnes and 11,000 tonnes respectively in 2018.


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