Bakkafrost presentation Q1 2010
The Bakkafrost Group's Operational EBIT* for Q1 2010 was DKK 50.4 million, and Operational EBIT/kg DKK 8.78 (NOK 9.56). Net profit for the period after taxes was DKK 46.2 million. The biological performance is still good and the market conditions are very good. However the financial performance is on short term negatively impacted by low, almost-pure trout sales, reports www.megafishnet.com with reference to Bakkafrost Group.
Commenting on the results, CEO Regin Jacobsen said:
"The Q1 2010 result represents, as previously announced, a quarter in which we implemented the change of strategy in the Farming West division, in which we changed to pure salmon production. In the transition period in 1H 2010, this has a negative impact on the overall result, and on harvested volumes. We expect, however, from second half of 2010, harvested volumes will start to increase again, which should be reflected in the results following the transition.
The operating revenues amounted to DKK 190.4 million in Q1 2010 (DKK: 185.7 million in proforma 1Q 2009) and represents an increase of 3%, although volumes are reduced by 22%.
The Bakkafrost Group harvested a total of 5,744 tonnes gutted weight in Q1 2010 (7,318 tonnes gutted weight in Q1 2009 merged). Of this, Bakkafrost Farming North contributed 4,983 tonnes and West (former Vestlax) contributed 761 tonnes, as it switches from trout/salmon to pure salmon production.
Due to lower smolt releases in 2008 and the switch to pure salmon production in Farming West, the harvested volumes in 1H 2010 will be affected. The total harvested quantities for 2010 and 2011, on average for both years, is still estimated to be around 60,000 tonnes gutted weight.
Farming Segment:
Operational EBIT/kg for the farming segment was DKK 9.19 (NOK 10.00) per harvested kg, compared to DKK 4.50 (NOK 5.39) in Q1 2009. Farming North had a calculated Operational EBIT of DKK 10.37 (NOK 11.29), and Farming West had an Operational EBIT of DKK 1.44 (NOK 1.57). The unsatisfying result in Farming West is a result of the trout production in the quarter, which according to the company's strategy is being phased out. The overall increase in the performance of the Group reflects the increase in the salmon price, the excellent biological situation and improved performance in general. The profit after tax for Q1 2010 was DKK 71.0 million (DKK 17.5 million in proforma Q1 2009) for the farming segment.
Value Added Products (VAP) Segment:
Operational EBIT for the value added products (VAP), segment, which is EBIT adjusted for provisions for onerous contracts and listing costs, was DKK -0.65 (NOK -0.70) per kg gutted weight (DKK -0.33 (NOK -0.40) per kg in Q1 2009). The continued increase in the salmon price from 2009 and during Q1 2010 reflects the result from the value added segment. The time lag between the movements in the fresh salmon price and the contract price for value added products leads to a significant negative result when spot market prices increase and a positive result when spot market prices decrease.
Contacts:
Regin Jacobsen, CEO of P/F Bakkafrost: +298 235001 (mobile)
Teitur Samuelsen, CFO of P/F Bakkafrost: +298 235111 (mobile)
Glyvrar, 26 May 2010
P/F Bakkafrost
Bakkavegur 9
PO Box 221
Fo-625 Glyvrar
Tel. +298 405000
Fax +298 405009
About Bakkafrost
Bakkafrost is the largest salmon farmer on the Faroe Islands, with a production of 30,650 tonnes gutted weight in 2009. The Group is fully integrated from smolt to VAP and sales. The Group operates licenses on 14 farming sites located in 13 different fjords, and owns 44% of the total licenses on the Faroe Islands. The Group has primary processing in Klaksvík and Kollafjørð and secondary processing (VAP) in Glyvrar. The headquarters is located in Glyvrar, and the company has a total of 514 employees.