SalMar (SALM) Q3 2024 earnings summary

Executive summary

• Q3 2024 results were impacted by significant biological and operational challenges in Norwegian farming, including jellyfish, high sea temperatures, and lice, but Sales & Industry delivered strong performance due to high contract share and favorable market conditions.

• Harvest volume for the group was 60,300 tons, up 15.4% sequentially but down 17.8% year-over-year, with operational EBIT for Q3 2024 at NOK 1,041 million, down from NOK 2,289 million year-over-year.

• Strategic moves included acquiring controlling interests in Knutshaugfisk, increasing stakes in Refsnes Laks, Øylaks, and Hitramat Farming, and selling Osan Settefisk AS.

• Systematic efforts to optimize the value chain, cost structure, and adapt to environmental conditions remain central, with ongoing improvements in genetics, feed, technology, and innovation initiatives.

• Volume guidance for 2024 was reduced due to biological issues, but 2025 guidance increased, reflecting expected recovery and acquisitions.

Financial highlights

• Group operating revenues for Q3 2024 were NOK 6,158 million, down from NOK 7,512 million in Q3 2023, with operational EBIT at NOK 1,041 million and EBITDA at NOK 1,462 million.

• Operational EBIT per kg was NOK 17.3, down from NOK 29.3 year-over-year; profit after tax was NOK 260 million.

• Net interest-bearing debt including leasing increased to NOK 19.7 billion; available liquidity at NOK 6.2 billion.

• Adjusted EPS for Q3 2024 was NOK 2.8, down from NOK 8.5 in Q3 2023.

• Cash flow from operating activities in Q3 2024 was NOK 1,086 million, down from NOK 2,977 million in Q3 2023.

Outlook and guidance

• 2024 harvest guidance: Norway 217,000 tons, SalMar Aker Ocean 6,900 tons, Iceland 13,000 tons, Scotland 40,000 tons; 2025 guidance: Norway 254,000 tons, SalMar Aker Ocean 9,000 tons, Iceland 15,000 tons, Scotland 32,000 tons.

• Group harvest volume guidance for 2024 is 217,000 tons, increasing to 254,000 tons in 2025, with total group volume projection of 370,000 tons including Scottish Sea Farms share.

• Global supply growth for Atlantic salmon expected to remain limited in 2024 and low in 2025, while demand remains strong and forward prices indicate higher salmon prices.

• Contract share for Q4 2024 is around 28% in Norway.