Norcod lost NOK 41m in Q3 but built biomass

Norwegian cod farmer Norcod made an operating loss of NOK -28 million in the third quarter of 2023, up from NOK -3m in Q3 2022, it said in a report today.

The increased operating loss is mainly explained by increased operating expenses, offset by increased revenues. Net loss for the period was NOK 41m, up from NOK 5m in Q3 2022.

The company achieved gross sales revenue of NOK 21m in the quarter, up from NOK 2m in the same period last year, when Norcod didn’t harvest fish. Norcod harvested 144 tonnes of cod in Q3 2023.

Operating expenses for the period were NOK 50m, up from NOK 5m in Q3 2022.

For the first nine months of 2023, Norcod achieved gross sales of NOK 186m, up from NOK 119m in the same period last year due to increased harvest volume. Increased operating costs meant that the company made an operating loss of NOK -188m (Jan-Sept 2022: NOK -91m). Net loss for the period was NOK -136m, on the same level as in 2022.

Heavy investments

“Norcod is continuously optimising production skills and utilisation of production capacity,” the company said in its report. “The next years to come, Norcod’s ambition is to increase production and harvest volume at a pace that is beneficial for the environment, our customers, and our shareholders. This ambition implies heavy investments in biomass, and Norcod is working diligently to optimise the company.”

Q3 2023 had been characterised to strong operational performance, said Norcod.

“Feed and fish performance has been on or above budgeted targets. The interaction between dedicated operational teams at the sites and highly competent feed operators at our feed centre works very well and produces good results. By the end Q3 the year-on-year standing biomass was up 7%.”

During the quarter, Norcod received approval for a new production site, Bjørnvika, in Nesna municipality, which is its second farm in the area alongside its Labukta site, which is beginning its first production cycle.

“Bjørnvika’s ideal conditions make it a perfect fit for our goal of providing premium cod sustainably. This addition of capacity brings Norcod’s total number of production sites to six along the Norwegian coastline, with 17,500 tonnes MAB (maximum standing biomass) in total.”

'Always in season'

Norcod said the recent acquisition of the Kråkøy Slakteri harvest facility had strengthened its ability to offer fresh cod all year round. “Going forward, Norcod is always in season,” said the company, which has positive expectations on the market outlook.

“In the short-term perspective, we know that customers are looking forward to having Norcod back during the next quarters as the retailers especially appreciate having Norcod in their stores due to predictability (it offers) on the supply side.

“In the longer-term perspective, significant quota cuts for the Barents Sea cod expected from 2024 and beyond implies bottlenecks on the supply side of Atlantic Cod. We are also looking towards overseas markets such as US, Japan, Korea and China, which is still considered to hold great potential as for volume and price as they value the high quality and freshness of the farmed cod.”