Low prices and high costs hit NRS Q3 earnings

EBIT per kilo was NOK 4.21, less than a quarter of the NOK 19.60 recorded in Q3 2019.

“The market price of salmon has, as normal, been seasonally low in the quarter but is also impacted by the Covid-19 pandemic,” said NRS chief executive Charles Høstlund in a press release.

“In the quarter NRS finished harvest of a generation that has had high production costs. Our margins in this quarter are therefore affected by this. We have had good growth throughout the quarter, and by starting to harvest a new generation we expect lower production costs in the next quarter.”

42% bigger harvest

The company’s farming division posted an operational EBIT of NOK 42.3m in the quarter, compared with NOK 138.7m in Q3 2019.

NRS harvested 10,058 tonnes gutted weight in the quarter, 42% more than in the same quarter last year.

For 2020, the harvest volume is expected to be 32,500 tgw and for 2021 the harvest volume is estimated to 40,000 tonnes, which is an increase of 23% compared with 2020.

The estimated number of smolts put to sea this year is 10 million. Sold volume from the sales business in the quarter was 27,110 tonnes of salmon, 10% higher than in the corresponding quarter last year.

Strong credit line

NRS said it has a strong financial position with NOK 1.1 billion in unutilised credit facilities at the end of the third quarter of 2020. 

“NRS has high expectations of our aquaculture investment in Iceland, through Arctic Fish, of which we own 50%,” said Høstlund.

“We want to take this company a step further and have therefore engaged financial advisers to explore a potential listing of Arctic Fish on (Norway’s) Merkur Market. A possible result of the process is that NRS will surpass majority ownership in Arctic Fish after the transaction.”