(Figures in parenthesis refer to the same period last year unless otherwise specified)
Bakkafrost recorded revenues of
The full-year revenues in 2023 were
The performance in Q4 2023 per region was very uneven:
- Revenues of
DKK 1,478 million (1,641 million) -
Operational EBIT of
DKK 460 million (525 million)
- Revenues of
DKK 84 million (298 million) -
Operational EBIT of
DKK -104 million (-149 million)
Commenting on the result, CEO
"Bakkafrost delivered strong results in the fourth quarter 2023 with improved operating margin. Markets have been strong, with high demand in all regions. Bakkafrost salmon was well appreciated with good premium in the market, especially strong development in
I am proud of the progresses from the high focus on fish health and welfare in the Bakkafrost's operation in the
After a troublesome third quarter in
During Q4 2023, the FOF segment sourced 53,552 tonnes (46,051 tonnes) of raw material. The Operational EBITDA margin was 25% (14%), and fish feed sales amounted to 39,354 tonnes (32,600 tonnes).
For the full year 2023, the FOF segment's operational EBITDA margin was 23% (18%). During the full year 2023, Havsbrún sourced 467,037 tonnes (297,814 tonnes) of raw material.
In Q4 2023, the Freshwater segments in the
- Freshwater FO: 5.1 million (5.0 million),
- Freshwater SCT: 1.7 million (3.5 million).
In 2023, the freshwater segments have released a total of 23.2 (25.4) million smolts:
- Freshwater FO: 14.2 million (14.4 million),
- Freshwater SCT: 9.0 million (11.0 million).
In Q4 2023, the Freshwater FO segment made an operational EBIT per kg released smolt of
The Farming segments achieved higher prices in Q4 2023 than in Q4 2022. Both Farming FO and Farming Scotland segments had lower harvest volume in Q4 2023 compared to Q4 2022. In Q4 2023, the Farming SCT segment had incident-based costs of
The total combined harvest in Q4 2023 of the farming segments in the
- Farming FO: 16,005 tgw (19,276 tgw),
- Farming SCT: 1,062 tgw (5,198 tgw).
In 2023, the farming segments have harvested a total of 73,006 tonnes gutted weight (90,603):
- Farming FO: 52,408 tgw (66,686 tgw),
- Farming SCT: 20,598 tgw (23,917 tgw).
In Q4 2023, the Farming FO segment made an operational EBIT/kg of
The Services segment made an operational EBIT/kg of
The Sales & Other segment had a revenue of
The performance according to the previously used business segment structure can be found in the Appendix.
The long-term goal of the Board of Directors is that 30-50% of earnings per share shall be paid out as dividend. Bakkafrost's financial position is strong with a solid balance sheet, a competitive operation and available credit facilities. The Board of Directors proposes to the Annual General Meeting that
* The dividend per share in NOK is subject to changes depending on the exchange rate between NOK and DKK, which will be announced after the Annual General Meeting.
OUTLOOK
Market
Stable supply in Q4 2023
The supply of salmon increased slightly by 0.3% in Q4 2023 compared to Q4 2022, incl. inventory movements. Without inventory movements, the supply reduced 1.8%, according to the latest estimate from Kontali Analyse.
Stable salmon prices in Q4 2023
Salmon spot prices (in EUR) were 0.2% lower this quarter compared to Q4 2022. Prices in Q4 2023 were affected by the nearly unchanged supply and strong demand for salmon from certain markets such as the
2% growth in 2024
No growth in global supply is expected for H1 2024. In H2 2024, the global supply is expected to grow around 4%, compared to H2 2023. For the full year 2024, the global supply is expected grow around 2%, excluding inventory movements.
Bakkafrost has a strong focus on ensuring a well-balanced flow to the different markets to increase diversification and mitigate market risk. Bakkafrost operates in the main salmon markets,
Farming
The farming operation in the
In the Faroese freshwater operation, Bakkafrost has been working intensively for a long time to improve the production of large smolt, which is more complicated. The quality and performance of the large smolt have improved a lot since the first generation came from the Strond hatchery. The large-smolt production is moving into a phase focusing on maintaining consistent size and high quality of the smolt while increasing production volumes. The Norðtoftir, Glyvradal and Viðareiði hatcheries have been expanded which gave a capacity increase of more than 50% and the production and capacity utilisation are now growing steadily. In Q4 2023, Bakkafrost signed a contract to build a big new hatchery in Skálavík, Faroe IsIands, which will increase the production capacity by around 7 million smolt at 500g. The construction will begin in Q1 2024 and when it is finished in the next three years, the annual smolt production capacity in the
Bakkafrost's farming operation in
In order to address the biological risks, Bakkafrost has made strategic adjustments to its short-term plans and production strategy for the Scottish farming operation. A comprehensive risk assessment has been conducted for all farming sites, evaluating the feasibility of stocking and farming these sites using various strains, hatcheries, and smolt sizes. Based on this evaluation, Bakkafrost will prioritise and advance the utilisation of large, high-quality smolt from the Applecross hatchery over external sources. Consequently, Applecross will supply nearly all of the required smolt to the marine sites in 2024.
Some farming sites may not be restocked or remain productive during Q3 until the risks have been mitigated through the use of large, high-quality smolt. This approach will reduce the biomass at risk in Q3 and result in around 70% of the 2024 harvest volume being harvested in the first half of the year.
The Scottish freshwater operation is focused to grow the production of big and healthy smolt at Applecross, after the first trial-batch of 250g smolt was released in
Smolt release
Bakkafrost has guided for a smolt release in the
Million smolt transferred | '24e | '23 | '22 | '21 | '20 | '19 |
FO | 17.8 | 14.4 | 14.5 | 14.4 | 14.3 | 12.7 |
SCT | 9.3 | 10.5 | 10.8 | 11.1 | 10.4 | 12.4 |
Avg. weight (g) | ||||||
FO | 450 | 396 | 345 | 376 | 320 | 205 |
SCT | >200 | 117 | 107 | 95 | 88 | 83 |
In the freshwater hatchery operation, Bakkafrost has a focus on ensuring stable growth and continuous improvements of smolt quality. In the Faroes Islands, it is important to harmonise the size and quality of the smolt as it leads to better utilisation of marine farming sites and increased harvest weights.
In 2024, Bakkafrost expects to harvest around 66,000 tonnes gutted weight in the
Expected harvest profile as a % of total harvest pr. region | Q1 | Q2 | Q3 | Q4 |
FO | 20% | 25% | 27% | 28% |
SCT | 25% | 44% | 16% | 14% |
The estimates for harvest volumes and smolt releases in both geographies are dependent on biological development.
Sales & VAP (Value added products)
Bakkafrost's highly flexible value chain includes state-of-the-art VAP processing capacity, which enables the company to adapt effectively to rapidly changing market situations.
As a result of changes in the Faroese revenue tax, Bakkafrost has adjusted the strategy for contracted VAP (Value-Added Products) to reduce contract exposure for 2024.
For 2024, Bakkafrost has signed contracts covering around 9% of the expected harvest volumes in the
FOF (Fishmeal, oil and feed)
The outlook of fishmeal and fish oil production is dependent on the availability of raw materials.
The ICES 2024 recommendation for blue whiting is 1,530 thousand tonnes, which represents a 12.5% increase from the recommendation for 2023.
In 2024 Bakkafrost expects continued high production volumes of fishmeal and normalisation of fish oil production volumes.
The major markets for Havsbrún's fish feed are the internal Faroese and Scottish Farming segments.
Investments
On the Capital Markets Day on
The main purpose of the investments in
The investments in the
With the investment plan, Bakkafrost expects to sustainably grow the total annual harvest volumes to 165,000 tonnes in 2028. Over the same period, the total annual production capacity in Bakkafrost's value chain will reach 200,000 tonnes gutted weight.
Please find the Company's Q4 2023 report and the Q4 2023 presentation enclosed.
Contacts:
Regin Jacobsen , CEO ofP/F Bakkafrost : +298 235001 (mobile)-
Høgni
Dahl Jakobsen , CFO ofP/F Bakkafrost : +298 235060 (mobile)
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
About Bakkafrost:
Bakkafrost is the largest salmon farmer in the
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