Record high harvest for Salmon Evolution 

Land-based fish farmer Salmon Evolution today reported another profitable quarter with operating income of NOK 170.5 million (£12.4m), a group consolidated EBITDA (a measure of operating profit) of NOK 45.4m and a positive cash flow from operations of NOK 37.5m.

The results for Q2 2024 were achieved with a record high harvest volume of 1,581 tonnes (head on gutted) of Atlantic salmon in the quarter, as well as a strong achieved price and a positive underlying cost development.

In the first half of 2024, Salmon Evolution had close to NOK 300m in revenue and an operating EBITDA of almost NOK 100m.

Wound problems

In May, the company experienced wound problems with a batch of smolts newly stocked at its hybrid recirculating / flowthrough facility at Indre Harøy, Norway. The mortality in that batch is now 19%, with the majority being fish that have been actively taken out by the company. 

“Things look better in that group in recent weeks, and I hope and believe that the situation will return to normal. The fish are eating well, that is always a good sign,” said chief executive Trond Håkon Schaug-Pettersen during the presentation of the results.

The company is implementing a new wound vaccine on all smolts.

“I would also like to emphasise that this is an isolated incident, we have not had wounds in any of the other tanks or batches,” said Schaug-Pettersen. “We have also made some modifications to the smoltification process. The last two batches we have put in are performing very well and presenting better than anything before, and they are past the point where the ulcerated group had their problems. We are therefore confident that the problems were related to the smolts, not to the facility.”

5,000 tonnes for the year

For the second half of the year, Salmon Evolution expects a total harvest volume of between 2,400 and 2,600 tonnes, with 1,200 to 1,300 tonnes for Q3. This will give a total volume of approximately 5,000 tonnes for the whole of 2024.

“Without the challenges we had with smolt quality on batches 10 and 11, with mortality and sorting, we could have reached a total volume of 7,000 tonnes. When we get everything going the way we want and get the facility utilised, we believe we should be able to get close to 8,000 tonnes out of the phase 1 facility,” said Schaug-Pettersen.

The company is also working to optimise production by, among other things, increasing the average weight of smolts stocked from 130 grams to 400 grams. According to calculations, this will increase the annual production volumes in phases 1 and 2 from 15,800 tonnes to 18,000 tonnes. The production time for a batch in the plant will decrease from 11 months to 8-9 months. The number of batches deposited per year will also increase from 6 to 8.

Wants new sites in Norway

The company is continuing its efforts to establish production in South Korea and North America but is now also looking for other sites in Norway, as well as building more capacity on its current site.

“In North America we have found a location with high potential, but we are still working on details before we say more,” said Schaug-Pettersen.

In South Korea, the company is still working on cost optimisation and securing permits, which will take some time.

“We are also looking at Norway. We believe that Norway will be cost effective on a land-based basis, so we are also looking at alternatives here that we believe could be interesting in a longer perspective,” said Schaug-Pettersen.

Q2 highlights

The company's highlights in the quarter:

• Positive cash flow from operations of NOK 37.5m
• The group achieved an EBITDA of NOK 45.4m - operating EBITDA of NOK 58.6m and NOK 37.1 per kg in EBITDA
• Record high harvest volume in Q2 of 2024 of 1,581 tonnes HOG. 
• Achieved price of NOK 106 per kilo, driven by a superior share of 96%
• Mortality on the groups harvested in Q2 was between 3 and 4.6%
• Net biomass growth of 1,261 tonnes live weight (LW) 
• High focus on filling up the facility and laying the foundations for strong growth in the second half of 2024
• Progress for phase 2 at Indre Harøy. Successful share issue in June, which raised gross proceeds of NOK 365m, and an increase in bank facilities of NOK 675m to finance the project
• Strong financial position with NOK 983m in available liquidity, including committed, unused credit facilities.