The Bakkafrost Group delivered a total operational EBIT of DKK 65 million (DKK
388 million) in Q2 2025.
(Figures in parenthesis refer to the same period last year unless otherwise
specified)
The performance in Q2 2025 per region was as follows:
· Faroe Islands Revenues of DKK 1,144 million (1,187 million)
Operational EBIT of DKK 211 million (275 million)
· Scotland Revenues of DKK 431 million (880 million)
Operational EBIT of DKK -146 million (113
million)
Commenting on the result, CEO Regin Jacobsen said:
"We are not satisfied with the financial results in this quarter. A significant
increase in global salmon supply has led to low salmon prices, impacting our
earnings.
At the same time, we are very pleased with the achieved cost reduction in the
Faroes, highlighted by a 12% reduction in our farming costs, and we continue to
prioritize cost discipline also going forward.
In the Faroe Islands, biological performance reached the highest level ever
recorded for the company, which we view as a very strong achievement. The
farming segment delivered exceptionally strong biological performance in the
quarter, with robust growth and survival rates at the best level seen in more
than a decade. Feeding activity reached all-time highs, while mortality was
reduced by 52% compared to the same quarter last year. In the Faroese freshwater
operation, performance has stepped up to a new level - delivering smolt of
unprecedented quality and robustness, building a strong foundation for our
future farming. This is clearly evidenced by post-transfer survivability at
record-high levels.
In Scotland, we are not pleased with the performance in the freshwater
operation, where we unfortunately faced significant mortalities due to diseases.
To address this, we are integrating the Scottish freshwater operations under the
Faroese organisation, led by the Group Freshwater Director, and have
strengthened the site management at Applecross with experienced staff from the
Faroe Islands. While freshwater remains a challenge, the Scottish marine
operations have shown good development overall, although some one-off events led
to higher mortality.
Despite the pressure from lower prices, the strong biological performance in
both the Faroes and Scotland has supported volume growth. We are therefore
increasing our harvest guidance for the year in both regions by a total of 7%.
Our strategic priorities remain unchanged - to continue building biological
resilience, strengthen operational performance across regions, and secure long
-term value creation."
During Q2 2025, the FOF segment sourced 159,951 tonnes (90,575 tonnes) of raw
material. The Operational EBIT margin was 13% (16%), and fish feed sales
amounted to 37,533 tonnes (32,949 tonnes).
For H1 2025, the FOF segment's operational EBIT margin was 13% (20%). During H1
2025, Havsbrún sourced 269,453 tonnes (227,449 tonnes) of raw material.
In Q2 2025, the Freshwater segments in the Faroe Islands and Scotland
transferred a total of 6.4 million (5.5 million) smolts combined:
· Freshwater FO: 5.4 million (4.0 million),
· Freshwater SCT: 0.9 million (1.5 million).
For H1 2025, the freshwater segments have released a total of 10.1 (9.2) million
smolts:
· Freshwater FO: 8.6 million (6.1 million),
· Freshwater SCT: 1.5 million (3.1 million).
In Q2 2025, the Freshwater FO segment made an operational EBIT per kg
transferred smolt of DKK 33.30 (DKK 47.23), corresponding to NOK 52.09 (NOK
73.19). The Freshwater SCT segment made an operational EBIT per kg transferred
smolt of DKK -464.58 (DKK -218.76), corresponding to NOK -726.77 (NOK -338.99).
The Farming segments achieved lower prices in Q2 2025 than in Q2 2024. The
Farming segments had higher volumes in Q2 2025 compared to Q2 2024. In Q2 2025,
the Farming SCT segment had incident-based costs of DKK 39 million (DKK 24
million).
The total combined harvest in Q2 2025 of the farming segments in the Faroe
Islands and Scotland was 23,054 tonnes gutted weight (21,592 tgw):
· Farming FO: 16,020 tgw (10,226 tgw),
· Farming SCT: 7,034 tgw (11,366 tgw).
For H1 2025, the farming segments have harvested a total of 48,254 tonnes gutted
weight (43,149):
· Farming FO: 34,934 tgw (24,520 tgw),
· Farming SCT: 13,320 tgw (18,629 tgw).
In Q2 2025, the Farming FO segment made an operational EBIT per kg of DKK 0.24
(DKK 20.15), corresponding to NOK 0.37 (NOK 31.23). The Farming SCT segment made
an operational EBIT per kg of DKK -18.13 (DKK 9.79), corresponding to NOK -28.36
(NOK 15.18).
The Services segment made an operational EBIT per kg of DKK 0.74 (DKK 0.56),
corresponding to NOK 1.16 (NOK 0.87). The operational EBIT margin for the
segment was 8% (6%).
The Sales & Other segment had a revenue of DKK 2,198 million (2,582 million) and
an operational EBIT margin of 4% -2%. The operational EBIT per kg was DKK 4.19
(DKK -2.65), corresponding to NOK 6.55 (NOK -4.10).
The performance related to the Faroe Islands and Scotland as a region can be
found in the Appendix.
The long-term goal of the Board of Directors is that 30-50% of earnings per
share shall be paid out as a dividend. Bakkafrost's financial position is
strong, with a solid balance sheet, a competitive operation, and available
credit facilities. The Annual General Meeting convened on April 30 2025, decided
to pay out a dividend of DKK 8.44 (NOK 13.37) per share. The total dividend of
DKK 501 million (NOK 781 million) was paid in May 2025.
OUTLOOK AND OPERATIONAL PERFORMANCE
Market
Substantially increased supply in Q2 2025
The supply of salmon increased 16.6% in Q2 2025 compared to Q2 2024, incl.
inventory movements. Without inventory movements, the supply increase was 18.1%,
according to the latest estimate from Kontali Analyse.
Lower salmon prices in Q2 2025
Salmon reference prices (in NOK) for 4-5kg superior salmon were 33.3% lower this
quarter compared to Q2 2024. The price reduction was driven by substantial
increase in supply from several regions, most dominantly from Norway following
improved biology and strong growth due to higher seawater temperature.
9% growth in 2025
The global supply is expected to increase around 5% in H2 2025, compared to H2
2024. For the full year 2025, the global supply is expected grow around 9%.
In Q2 2025, the salmon market has been strongly affected by the massive supply
increase in the quarter, especially from Norway but also from Chile, the Faroe
Islands and Iceland. The improved biology in Norway has also increased the share
of superior fish sold to the market, consequently leading to a unexpected
oversupply to the spot market.
Bakkafrost has a strong focus on ensuring a well-balanced flow to the different
markets to increase diversification and mitigate market risk. Bakkafrost
operates in the main salmon markets, Europe, the USA, and the Far East. Since
the beginning of the war in Ukraine, Bakkafrost has stopped all trading with
Russia.
Farming
In Q2 2025, the biological performance in the Faroese farming operation
continued to strengthen and reached one of the best positions ever. Sea lice
levels were well controlled, and harvest weights have been high, despite one
farming site deliberately being harvested early to fit with the production plan
and smolt restocking schedule. Feeding volumes have been record-breaking, while
growth and survivability rates have increased significantly. Total farming costs
continue to trend down from the peek-levels in 2023-2024, driven by the strong
biological performance and lower feed costs. Due to strong biological
performance, Bakkafrost is increasing it's Faroese harvest target for 2025 to
82,000 tonnes.
Continuous improvements also characterise the Faroese freshwater operation with
increased the production volume of large high-quality smolt. The capacity
utilization is growing with increased production volume and downward-trending
production costs. The volume is projected to rise in 2025, with smolt weights a
bit higher than in 2024. The current hatchery capacity in the Faroes allows for
an annual smolt production of 9,000 tonnes, equalling 18 million smolt of 500g.
This will increase to 24.4 million smolt of 500g when the ongoing construction
of the new hatchery in Skálavík will be finished late 2026. The construction of
the hatchery progresses according to plan and the operation is expected to start
in Q2 2026. In Q2 2025, the average weight of transferred smolt in the Faroe
Islands was 464g, which is 20% higher than in 2024.
In Q2 2025, some Scottish marine farming sites faced disease issues, resulting
in higher mortality costs and write-downs until mid-July. However, strong
biological performance at other sites led to good harvest weights and growth. As
a result, Bakkafrost has raised Scotland's 2025 harvest target to 22,000 tonnes.
The fish affected by disease in the quarter were "legacy-fish", representing the
reduced smolt quality from the past. During 2025 and into 2026, the biomass at
sea will gradually change character, transitioning to be based on large and high
-quality smolt. This strategic shift is expected to enhance overall fish health
and growth rates, leading to a more robust and sustainable aquaculture
environment.
In the Scottish freshwater operation the main focus is to continue the ramp-up
of the production of large high-quality smolt from Applecross. This is not a
straight-line development, but a delicate and gradual process involving some
level of risk which reduces as the operation is fine-tuned, and all procedures
executed at least once. While some of the production modules at Applecross
display good performance with strong growth and low mortality, disease-driven
exceptional mortality was experienced in one of the Applecross modules in this
quarter, as reported on 15[th] July 2025.
Since the previous quarter, the new Applecross 6 module has been commissioned
and started operation. The Applecross hatchery now has a production capacity of
around 3,500 tonnes of smolt annually, planned to be transferred at weights
above 200g.
In Q2 2025, the average weight of transferred smolt from Applecross in Scotland
was 232g, which is 80% higher than in Q1 2024. The average smolt weight for all
Bakkafrost's smolt release in Scotland in the quarter was 170g, which is 79%
higher than in Q2 2024.
Reorganising the Scottish Freshwater operation under Group Leadership
A secure and steady ramp-up of the Scottish freshwater operation is essential to
strengthen overall performance in Scotland. Until now, the Scottish freshwater
department has worked closely with its Faroese peer to ensure effective
knowledge transfer and alignment on best practices.
To further consolidate this, the two freshwater departments have now been merged
under the leadership of the Group Freshwater Director, based in the Faroe
Islands. This step ensures a unified approach across geographies and leverages
the Group's extensive experience in freshwater management. At the same time, the
local team in Scotland continues to play a central role in daily operations,
with site management at Applecross further reinforced through the relocation of
experienced colleagues from the Faroes to support and complement the Scottish
workforce.
Smolt transfer
Bakkafrost's expected smolt transfer in 2025 in the Faroe Islands is around 18.5
million smolts with an average weight of around 430g. In Scotland, the smolt
transfer plan and smolt production strategy is currently under review by the new
Group Freshwater Management. Depending on the conclusions from this review on
optimal capacity utilisation and smolt sizes, the smolt transfer for 2025 is
expected to be 6-7 million smolt. The number and average weight of smolts
transferred are key elements of predicting Bakkafrost's future production.
Million smolt transferred '25e '24 '23 '22 '21 '20
FO 18.5 17.1 14.2 14.4 14.4 14.7
SCT 6-7 6.0 9.0 11.0 11.1 10.4
Avg. weight (g)
FO 430 410 396 345 376 320
SCT TBD 109 117 107 95 88
For 2025, Bakkafrost increases the expected harvest in the Faroe Islands from
77,000 tonnes to around 82,000 tonnes gutted weight. The expected harvest in
Scotland is also increased from 20,000 tonnes to around 22,000 tonnes gutted
weight. This gives an increased total harvest in 2025 of around 104,000 tonnes
gutted weight. The quarterly harvest profile is outlined in in the table below.
Biological, environmental and market conditions can affect the expected harvest
profile.
Expected harvest profile in 2025 as a % of total harvest pr. region:
Region Q1 Q2 Q3 Q4
FO 23% 20% 29% 29%
SCT 29% 32% 19% 20%
The estimates for harvest volumes and smolt transfers in both geographies are
dependent on biological development.
Sales & VAP (Value added products)
Bakkafrost's highly flexible value chain includes state-of-the-art VAP
processing capacity, which enables the company to adapt effectively to rapidly
changing market situations.
As a result of changes in the Faroese revenue tax, Bakkafrost has adjusted the
strategy for contracted VAP (Value-Added Products) to reduce contract exposure.
For 2025, Bakkafrost intends to sign contracts covering around 15-20% of the
expected harvest volumes in the Faroe Islands and Scotland combined.
FOF (Fishmeal, oil and feed)
The outlook of fishmeal and fish oil production is dependent on the availability
of raw materials.
The ICES 2025 recommendation for blue whiting is 1,447 thousand tonnes, which
represents a 5.4% decrease from the recommendation for 2024.
In 2025 Bakkafrost expects similar production volumes of fishmeal and fish oil
as in 2025.
Bakkafrost expects the feed production at Havsbrún to be around 150,000 tonnes
in 2025. Close to all of this will be sold internally to Bakkafrost's Faroese
and Scottish Farming segments.
Investments
On the Capital Markets Day on 17-18 June 2025, Bakkafrost announced a 5.0bn DKK
investment plan for 2026-2030. The main purpose is to improve efficiency, reduce
biological risk and enable continued sustainable growth in the Faroe Islands and
Scotland.
The investments in the Faroe Islands will increase the annual smolt production
capacity to 24.4 million smolt of 500g. The feed production capacity and
flexibility are also increased to further improve R&D capabilities and meet the
growing demand for feed as harvest volumes increase in the Faroe Islands and
Scotland. Also, investments in new farming sites and new farming technology are
included, as well as investments to improve harvest capacity and flexibility
with Live Fish Holding Tanks.
In Scotland, planned investments include site expansions and optimisation as
well as building a new harvest and processing facility to accommodate the
growing harvest volume.
As a shared service to the Group, the investment plan includes building 2 new
dual-freshwater treatment vessels in the FSV segment.
Incorporated into the investment plan is also 245mDKK earmarked to energy
transition, spread across the value chain.
With the investment plan, Bakkafrost expects to sustainably grow the total
annual harvest volumes to 162,000 tonnes in 2030.
Since the announcement of the 2026-2030 investment plan on the CMD in 2025,
Bakkafrost has decided to let some of the investments planned for 2025 rollover
into 2026 due to the weak market outlook for 2025. Consequently, the timing of
other investments in the announced 2026-2030 plan have been adjusted.
Financial
The global salmon product market's long-term balance is likely to favour
Bakkafrost. Bakkafrost has a long value chain and a cost-efficient production of
high-quality salmon products and will likely maintain financial flexibility
going forward.
In March 2022, Bakkafrost secured a 700 mEUR sustainability-linked credit
facility (expandable by 150 mEUR) with a 5-year term and 2-year extension
options which have been executed. This facility, along with Bakkafrost's strong
equity ratio, bolsters the Group's financial strength for organic growth and
cost reduction in Scotland, while also facilitating M&A and future organic
growth opportunities, and upholding an unchanged dividend policy.
Please find the Company's Q2 2025 report and the Q2 2025 presentation enclosed.
Contacts:
· Regin Jacobsen, CEO of P/F Bakkafrost: +298 235001 (mobile)
· Høgni Dahl Jakobsen, 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 and the second
-largest salmon farmer in Scotland. 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 the Faroe Islands and primary and
secondary processing in the Faroe Islands, Scotland and Denmark. The Group
operates sea farming and broodstock operations in both the Faroe Islands and
Scotland. The Group has built a biogas plant in the Faroe Islands. The
headquarter is located in the Faroe Islands, and the Group has sales and
administration offices in Grimsby (UK), Edinburgh (Scotland), Boulogne-Sur-Mer
(France), New Jersey (US) and Munkebo (DK). The Bakkafrost Group has 1,686
employees (full-time equivalents).
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