Release Date: February 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SalMar ASA (SALRF, Financial) reported an improvement in biological performance throughout the fourth quarter of 2024, providing a brighter outlook for the coming year.
- The company maintained a robust financial position, proposing a dividend of 22 NOK per share for the financial year 2024.
- Operational EBIT increased by 448 million NOK compared to the third quarter, driven by higher volume and price achievement.
- SalMar ASA (SALRF) has a flexible financing structure with new green bonds totaling 4,350 million NOK, ensuring sufficient liquidity for future investments.
- The company is investing in fish welfare and technology, with plans to increase preventive technology deployment to 40% of locations in 2025.
Negative Points
- 2024 was a challenging year for SalMar ASA (SALRF), with environmental conditions and biological challenges negatively impacting operational choices and performance.
- The company experienced high costs in Iceland, which dragged down results despite improved biological stability in the fourth quarter.
- Event-based mortality during the period increased costs by 73 million NOK.
- Harvest volume was reduced by 9% to 231,800 tons, with a decrease in EBIT per kilo due to biological challenges.
- The company expects continued high costs and very low volume in Iceland for the first half of 2025.
Q & A Highlights
Q: Can you elaborate on the biological challenges faced in 2024 and how they impacted operations?
A: Freud Onsen, CEO: 2024 was challenging due to environmental conditions and biological issues like jellyfish and lice, which affected operational choices and biological performance. These challenges impacted average weight, cost, growth, volume, quality, and the share of downgraded fish. However, we learned valuable lessons that will help us adapt and improve moving forward.
Q: What are the financial highlights for the fourth quarter of 2024?
A: Ulrich Steinwick, CFO: We harvested 67,300 tons in Norway with a margin of NOK 22.1 per kg, delivering an operational EBIT of NOK 1,485 million. Including Icelandic salmon and SalMar Ocean, we harvested 73,800 tons with a total operational EBIT of NOK 1,489 million and a margin of NOK 20.2 per kg. Despite early challenges, biological performance improved throughout the quarter.
Q: How is SalMar addressing the high costs in Iceland?
A: Freud Onsen, CEO: In Iceland, we harvested 6,500 tons with an operational EBIT of 16 million NOK. Although results improved due to higher volumes, the cost base remains high due to earlier challenges. We aim to optimize license utilization and build biomass in 2025, expecting high costs and low volumes in the first half of the year.
Q: What are the strategic investments planned for 2025?
A: Freud Onsen, CEO: We plan to invest NOK 1.9 billion in 2025, focusing on fish welfare. Investments include submerged technology, lasers, and upgrading harvesting and processing capacity. In Iceland, investments will focus on the sea phase to realize license potential, totaling NOK 130 million.
Q: Can you provide insights into the financial position and future growth strategies?
A: Ulrich Steinwick, CFO: Despite challenges, our financial position remains robust, enabling us to pursue organic growth and acquisitions. We issued new green bonds totaling NOK 4,350 million to support investments in the value chain. The board proposes a dividend of NOK 22 per share for 2024, reflecting our strong financial results and growth potential.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
