SalMar expects higher harvest volume, slightly higher cost level and a contract share of around 35% in the Q3

SALMAR Q2 - Continued solid operational perfomance and record high salmon prices gave strong results

• Total operational EBIT for Norway for the second quarter was NOK 952 million (NOK 32.34 per kg). Fish Farming Central Norway and Northern Norway delivered record results due to high salmon prices and continued strong operational performance.
• The underlying operational performance of Sales and Industry was solid, but results were affected by negative contribution from contracts.
• Icelandic operations delivered solid results due to strong price achievement and stable cost development.
• SalMar Aker Ocean progressing according to plan.
• The SalMar group’s operational EBIT for the second quarter was NOK 1,048 million (NOK 32.35 per kg). This excludes costs connected to lawsuits in North-America amounting to NOK 164 million.
• SalMar keeps the volume guiding for 2022 unchanged in all regions.
• In April the voluntary offer to acquire all outstanding shares in NTS ASA was accepted for 52.7 per cent of the shares. At the end of May 2022 SalMar announced a merger with Norway Royal Salmon, which was approved by the shareholders of the companies in subsequent EGMs at the end of June. The Norwegian Competition Authority approved the voluntary offer for NTS, and thereby the merger, in mid July 2022. Completion of the transactions is still subject to several conditions. The timing of when these conditions will be met is yet uncertain.

Solid operational performance and record high salmon prices

In the second quarter 2022, SalMar continued its solid operational performance. This, combined with record high salmon prices, led to solid financial results. SalMar reported an operational EBIT of NOK 1,048 million in the second quarter 2022 and harvested 32,400 tonnes of salmon. This resulted in a strong operational EBIT of NOK 32.35 per kg.

“In the second quarter, our many dedicated employees continued to deliver impressive performance and products of excellent quality. Our consistent and relentless efforts to operate on the terms of the salmon and with sustainability mindset in everything we do, have again proved to be a successful recipe,” said Linda L. Aase, CEO of SalMar ASA.

Fish Farming Central Norway and Fish Farming Northern Norway continued the trend with strong biological and operational performance, resulting in record operational EBIT per kilo of NOK 58.64 and NOK 69.12 respectively. The underlying operations within Sales and Industry segment was solid but record high salmon prices affected the profitability on contracts. Icelandic Salmon delivered solid results in the quarter driven by good biological performance, strong price achievement and stable cost development.

“Our financial results were of course also supported by high salmon prices in the market, although this fortunate market situation weakens the financial results in Sales and Industry due to profitability on contracts”, Aase said.

In the second quarter, the share of salmon sold on contract was 59 per cent. For the third quarter the contract rate is expected to be around 35 per cent, and around 40 per cent for the whole year.

Further sustainable growth

SalMar has an optimistic outlook for the future of the aquaculture industry. With a strong corporate culture built and nurtured by competent, dedicated, and passionate employees, SalMar is planning for and investing in further sustainable growth.

The expansion of the Senja smolt facility is close to completion with the first roe put in place in the facility and first smolt delivery expected in 2023. First smolt delivery from the Tjuin facility is expected in 2024. At the InnovaNor harvesting and processing plant in Northern Norway, ramping up of volume at both harvesting and value-adding processing continues during 2022.

SalMar is also leading the way in offshore aquaculture through its ownership and role as leading shareholder in SalMar Aker Ocean. Upgrade of Ocean Farm 1 and design of new units are progressing according to plan and the company is committed to new offshore investments as soon as the regulatory framework is in place. The company has an ambition to produce 150,000 tonnes of salmon offshore within 2030.

In April SalMar’s voluntary offer to acquire all outstanding shares in NTS was accepted for 52.7 per cent of the shares. Further, at the end of May 2022 SalMar announced a merger with NRS, which was approved by the shareholders of the companies in subsequent EGMs at the end of June. The Norwegian Competition Authority approved the voluntary offer for NTS, and thereby the merger, in mid July 2022. Completion of the transactions is still subject to several conditions. The timing of when these conditions will be met is yet uncertain.

Outlook

SalMar expects higher harvest volume, slightly higher cost level and a contract share of around 35 per cent in the third quarter of 2022.

For 2022, the previously communicated volume guidance remains unchanged in all regions. The expected harvestvolume for Norway is 175,000 tonnes, for Iceland 16,000 tonnes and for Scotland 46,000 tonnes.

The complete report and presentation for the second quarter and first six months of 2022 is attached.

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Address:	Industriveien 51,
City:	Kverva
State/ZIP:	(NO-7266)
Country:	Norway
Phone:	+47 7244 7900
Fax:	+47 7244 7901
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