Bakkafrost CEO Regin Jacobsen. (Photo Credit: Bakkafrost/FIS)
FAROE ISLANDS
Wednesday, August 27, 2014, 02:40 (GMT + 9)
Higher production of fishmeal and fish oil contributed for Bakkafrost Group to obtain an operational EBITDA of DKK 57 million (EUR 7.6 million) for the feed and fishmeal and oil segment in the second quarter this year compared to DKK 30.9 million (EUR 4.1 million in the same period last year.
For the segment, in the first half of the year, the operational EBITDA amounted to DKK 79.1 million (EUR 10.6 million) versus DKK 55.7 million (EUR 7.4 million) in the same period in 2013.
Meanwhile, the combined farming and VAP segment made an operational EBIT of DKK 180 million (EUR 24.1 million) in Q2 2014. The Farming segment made an operational EBIT of DKK 159.5 million (EUR 21.3 million). The salmon spot prices decreased during the quarter while the VAP contract prices stayed on a record high level.
The firm’s CEO Regin Jacobsen pointed out: "We are very satisfied with the result for Q2 2014, as all segment made profit. The biological development has been positive and our sales prices for VAP products are on a level where we again see positive margins.”
On the other hand, Bakkafrost experienced a decline in profit for the second quarter this year, which was DKK 126.2 million (EUR 16.9 million) compared to the same period last year, when profits reached DKK 184.2 million (EUR 24.7 million).
A fall was also observed in the profits for the first half of the year versus the first half in 2013, changing from DKK 251.7 million (EUR 33.7 million) to DKK 213.4 million (EUR 28.6 million).
What has risen is the total volumes harvested in Q2 2014, which were 11,212 tonnes gutted weight (tgw) from 10,540 tgw in the same period a year ago. The total harvested volumes in H1 2014 were 20,481 tonnes gutted weight versus 18,836 tgw in the same period last year.
In February this year, a routine surveillance test detected a possible pathogenic ISA-virus at Bakkafrost's farming site A-80. Therefore, the firm activated the ISA-contingency plan immediately. The detected site, together with all the neighbouring sites are now empty. No signs of ISA have been observed since, and no cost increase was related to the detection.
Bakkafrost considers that high seawater temperatures in Norway and higher production in Chile are expected to contribute to an 8 per cent rise in the supply of farmed salmon in 2014 compared with 2013. As to prices, it is anticipated that in the short term, the conflict with Russia could have a negative impact.
For 2015, prospects would be favourable for the salmon industry, given only a limited 1 per cent growth is expected.
Bakkafrost sells its products to some of the largest salmon markets in the world -- US, the Far East, Europe and Russia. Sales to Russia have been low the last quarters, but may increase as salmon from the Faroes Islands is not covered by the import ban put into effect by the Russian authorities.
By the end of April 2014, Bakkafrost acquired an additional 41.15 per cent of its subsidiary Havsbrún in Hanstholm Fiskemelsfabrik and after the acquisition, the Group owned 81.01 per cent of the company.