Bakkafrost (BAKKA) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was DKK 1,737 million, down 7% year-over-year, with operational EBIT at DKK 173 million, mainly due to lower salmon prices and the impact of an ISA outbreak in the Faroe Islands.

• Total harvest volume increased 30% year-over-year to 27,029 tonnes, with the Faroe Islands up 29% and Scotland up 32%, though margins were pressured by biological events and lower prices.

• Cash flow from operations rose sharply to DKK 575 million, with all segments except Scottish and Faroese farming and Scottish freshwater positive.

• Strong biological performance in the Faroe Islands and reduced mortality in Scotland due to operational improvements.

Financial highlights

• Operating revenue for Q3 2024 was DKK 1,737 million (Q3 2023: DKK 1,859 million); operational EBIT was DKK 173 million (Q3 2023: DKK 269 million).

• Profit after tax for Q3 2024 was DKK -116 million (Q3 2023: DKK 219 million); fair value adjustment of biological assets was DKK -266 million.

• Cash and cash equivalents increased to DKK 839 million; net interest-bearing debt decreased to DKK 2,710 million.

• Equity ratio stood at 62%.

• Cash flow from operations in Q3 2024 was DKK 575 million, up from DKK 185 million in Q3 2023.

Outlook and guidance

• 2024 harvest guidance: 63,500 tonnes in Faroe Islands and 26,100 tonnes in Scotland, totaling 89,600 tonnes; 2025 guidance is 100,000 tonnes (77,000 Faroe Islands, 23,000 Scotland).

• Moderate growth expected in Europe for Q4 2024 and low single-digit growth in 2025; Americas to see growth in 2H 2025.

• Feed prices expected to decline further, positively impacting costs into late 2025 and 2026.

• Capex plan for 2024-2028 is DKK 6.3bn, with Scottish investments reduced by DKK 800m for 2024-2025.

• Focus remains on de-risking in Scotland and ramping up larger, healthier smolt production.