Cod farmer 'will become profitable next year'

Norwegian cod farmer Norcod expects to reach profitability in 2026, when it is guiding for a harvest of 11,000 tonnes (whole fish equivalent), it said in a company update published today.

Norcod, which made an operating loss of NOK 204 million (£14.5m) in 2024, harvested 8,300 tonnes WFE last year and expects to produce a similar volume this year.

It said Norcod and cod farming is at an inflection point, ready to ramp up production with a clear path to profitability.

“Despite certain issues and risks, overall biology and growth has been stable and encouraging, giving confidence in scaling up production towards profitability,” the company said in its update.

More fish = lower cost

Norcod currently operates five sites and has licences for 19,079 tonnes of maximum allowed biomass (MAB). It plans to invest in four new sites with an assumed MAB of 3,600 tonnes per site, to reach a production target of 25,000 tonnes WFE, expanding MAB capacity to 33,120 tonnes.

Economies of scale at 25,000 tonnes would push production costs down from last year’s NOK 61.1 per kilo to NOK 43 per kilo, it said. The price achieved in 2024 ranged from NOK 50.9 per kilo in Q1 to NOK 62.9 per kilo in Q4.

To fund the expansion, the company is contemplating a private placement to raise at least NOK 150m and will raise a further NOK 130m-150m through increased borrowing.

“DNB Bank is, subject to completion of the private placement, committing an additional NOK 130-150m in debt financing to support the company’s growth plans,” Norcod wrote.

In its Q4 2024 report last week, Norcod said some of its largest shareholders have already indicated support covering the minimum amount of the equity increase.

In today’s document, it added that raising equity above the minimum target of NOK 150m would imply a faster roll-out towards the 25,000t WFE target.

Norcod said the market for farmed cod had never been stronger. Catch quotas for wild cod had dropped by 62% between 2021 and 2025, and prices for farmed cod were increasing due to development of end markets and available supply. The company said prices for farmed cod were expected to remain high due to farming’s ability to produce high-quality fish with year-round delivery.

Escape, maturation, mortality

The fish farmer had an escape at its Labutka farm in Nordland in November last year and reported increased mortality last summer when sea temperatures rose above normal levels. It has also had problems with fish reaching sexual maturity in the final growth phase, which led to early harvesting to prevent spawning.

On the issue of escapes, Norcod said it conducted inspections and examination of the net at Labukta in January 2025 together with representatives from the Norwegian Directorate of Fisheries and the supplier.

Changing nets

Actions taken to prevent a repeat of the escape comprise improved monitoring, surveillance, and procedures, as well as a comprehensive review of nets, including switching from generation nets (nets that remain in the water throughout the production cycle) to changing nets during the cycle.

With regard to mortality, which jumped from a quarterly average of around 2.5-3% to 8.1% in Q3 2024, Norcod said key initiatives include limiting handling of the fish during periods of high sea temperatures and reduced feeding as an effective measure to lower risk of premature growth.

Norcod is seeking the optimal lighting strategy to delay maturation – testing different approaches to placement, amount, type and duration of light control.

“The company closely monitors the fish throughout the production process and reports to authorities regularly, enabling early harvest should cod show signs of advanced maturation and potential for spawning,” Norcod wrote.

It added that it is observing positive signs from testing and adjustments of lighting, and intends to continue this strategy to drive further improvements.