The Bakkafrost Group delivered a total operating EBIT of DKK 303 million in Q2
2015. Compared with operating EBIT of DKK 212 million in Q2 2014, this is an
increase of 43%. Result after tax in Q2 2015 was DKK 191 million.
The total volumes harvested in Q2 2015 were 14,182 tonnes gutted weight, which
is a record high harvest in a quarter for Bakkafrost. The guidance for harvest
volumes for 2015 is unchanged. The farming segment delivered an operational EBIT
of DKK 248 million in Q2 2015. The VAP segment, which produced 5,064 tonnes in
Q2 2015, made an operational EBIT of DKK 31 million. The FOF segment delivered
an EBITDA of DKK 53 million in Q2 2015.
Commenting on the result, CEO Regin Jacobsen said:
"Bakkafrost harvested over 14 thousand tonnes in Q2 2015, which is the highest
quarterly harvest ever for Bakkafrost. This together with good operational
performance and positive market conditions resulted in a record high operating
EBIT in Q2 2015. Bakkafrost's focus on the operational performance is reflected
in the investment of the new wellboat, "Hans á Bakka". "Hans á Bakka" was
delivered in July and started operating in August 2015, which marks a milestone
in salmon farming in the Faroe Islands."
Bakkafrost released 1.4 million smolts in Q2 2015, which is in line with the
company's smolt release plan.
The good catch of pelagic fish around the Faroe Islands in Q1 2015 continued
into Q2 2015. Havsbrún has purchased 86 thousand tonnes of raw material in Q2
2015. Havsbrún's purchase of raw material in first half 2015 amounts to 161
thousand tonnes.
Bakkafrost's net interest bearing debt at the end of Q2 2015 was DKK 302
million, compared with DKK 233 million at year-end 2014. Bakkafrost had undrawn
credit facilities of approximately DKK 721 million at the end of Q2 2015, and
the equity ratio was 61%.
OUTLOOK
Market
The salmon market's global demand growth has increased the last years due to
high growth rate in emerging markets and a stable growth in other markets.
Expected global supply growth in 2015 is around 4-5% and 2-3% in 2016.
Production capacity is close to full utilization and further expansion relates
to high investments.
Farming
Bakkafrost expects to harvest 49,000-51,000 tonnes gutted weight in 2015.
Bakkafrost's forecast for smolt release in 2015 is 10.4 million pieces. The
estimates for harvesting volumes and smolt releases is as always dependent on
the biological situation.
Value added products (VAP)
Bakkafrost's long-term strategy is to sell around 40-50% of the harvested
volumes of salmon as value added products on fixed price contracts. The
contracts last for 6 to 12 months. Bakkafrost has signed contracts covering
around 75% of the VAP capacity for the rest of 2015.
Fish oil, -meal and feed (FOF)
The outlook for the production of fishmeal and fish oil has improved as the
available raw material for the production has increased. The quotas for catching
blue whiting in the North Atlantic have in-creased. With increased quotas,
Bakkafrost is optimistic that the raw materials needed for our production of
high quality salmon feed will be available.
Havsbrún's sales of fish feed in 2015 is expected to be at 73,000 - 77,000
tonnes. This is a reduction from the previous outlook at 83,000 - 87,000 tonnes,
as the sale of fish feed to external customers has been reduced. The expected
feed purchase from Bakkafrost's farming segment in 2015 is unchanged.
Investments
Bakkafrost has announced an investment plan for the period until 2017, latest
updated in August 2014. The purpose of the investment plan is to continue to
have one of the most costs efficient value chains in the farming industry, carry
out organic growth, increase flexibility and reduce the biological risk to meet
the future consumers' trends and to be more end-customer orientated.
The total investments for the period 2014-2017 were announced to be DKK 1,370
million including maintenance CAPEX. Investments in 2015 are expected to be DKK
550 million.
Financial
Improved market balances in the world market for salmon products and costs
effective production will likely improve the financial flexibility going
forward. A high equity ratio with the Group's bank financing and the issuance of
bonds makes Bakkafrost's financial situation strong. This enables Bakkafrost to
carry out its investment plans to further focus on strengthening the Group,
M&A's, organic growth opportunities and fulfil its dividend policy in the
future.
Please find enclosed the Company's Q2 2015 report and presentation.
Contacts:
Regin Jacobsen, CEO of P/F Bakkafrost: +298 235001 (mobile)
Gunnar Nielsen, CFO of P/F Bakkafrost: +298 235060 (mobile)
This information is subject of the disclosure requirements pursuant to section 5
-12 of the Norwegian Securities Trading Act.
About Bakkafrost:
Bakkafrost is the largest salmon farmer in the Faroe Islands. The Group is fully
integrated from feed production to smolt, farming, VAP and sales. The Group has
production of fishmeal, fish oil and salmon feed in Fuglafjørður. The Group
operates licenses on 14 farming fjords. The Group has primary processing in
Klaksvík, Strendur, Kollafjørður, and secondary processing (VAP) in Glyvrar and
Fuglafjørður. The headquarter is located in Glyvrar, and the company has a total
of around 700 employees.
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