Bakkafrost: Operational EBIT of DKK 415 Million for Q4 2019 (video)
Wednesday, February 26, 2020, 01:40 (GMT + 9)
The Bakkafrost Group delivered a total operating EBIT of DKK 415.3 million in Q4 2019. Harvested volumes for the Group were 25.9 thousand tonnes gutted weight, whereof 17.9 thousand tonnes were harvested in the Faroe Islands (FO) and 7.9 thousand tonnes in Scotland (SCO). The combined Farming FO and VAP segments made an operational EBIT of DKK 374.9 million. The farming segment made an operational EBIT of DKK 338.3 million in the Faroe Islands (FO) and DKK 18.1 million in Scotland (SCO). Achieved prices and volumes in the Faroese operations increased and thus had a positive effect on the operational EBIT. The VAP segment made an operational EBIT of DKK 36.6 million. The EBITDA for the FOF segment was DKK 57.7 million.
(Figures in parenthesis refer to the same period last year unless otherwise specified)
On the 8[th] of October 2019, Bakkafrost acquired majority of the Scottish Salmon Company (SSC). From this date, SSC is a part of the Bakkafrost Group and is consolidated into Bakkafrost's accounts. Unless otherwise stated, all figures presented in this press release include SSC from this date on. SSC's figures prior to this date are not included in the figures for the Group for the full year 2019 or in other comparative figures prior to this date.
The Group made a profit for Q4 2019 of DKK 219.5 million (DKK -6.6 million). For 2019, the profit was DKK 801.9 million (DKK 960.3 million).
Commenting on the result, CEO Regin Jacobsen said:
"We are satisfied with the result for 2019. The beginning of the fourth quarter was characterized by high supply of small fish, which caused disruption in the market. At the end of the quarter supply pressure shifted to demand driven growth.
Our harvested volumes in the Faroe Islands were the highest ever for a fourth quarter - with record big fish - the revenue and operational result was also record high for a fourth quarter. The biological performance has been very good.
The new Strond Hatchery is up-scaling production and contributes from now on significantly to our operation. We are pleased about the VAP segment's good results for the quarter.
2019 has been an eventful year for Bakkafrost. We have made a giant leap into a new geography by the acquisition of The Scottish Salmon Company. This acquisition has increased the scale of our operation significantly and brought us new possibilities to exploit for many years ahead. We are very excited about this but do realize that it will take time before we will really see results of the investments we will do in the Scottish operation. We are convinced that this is possible, however, with the committed people we have in the organization in Scotland and in the Faroe Islands."
The total volumes harvested in Q4 2019 were 25,855 tonnes gutted weight, where of 17,930 tonnes were harvested in the Faroe Islands (12,234 tgw) and 7,925 tonnes in Scotland. Total harvested volumes in 2019 were 65,109 tonnes gutted weight:
57,184 tonnes in the Faroe Islands (44,591) and 7,925 tonnes in Scotland.
In total, 10.7 million (3.3 million) smolts were transferred during Q4 2019, whereof 5.0 million were transferred in FO and 5.7 million were transferred in SCO. During 2019, 18.3 million (12.5 million) smolts were transferred: 12.7 million in FO and 5.7 million in SCO.
The combined FO farming and VAP segments made an operational EBIT of DKK 374.9 million (DKK 207.7 million) in Q4 2019. The operational EBIT per kg in Q4 2019 was DKK 20.91 (DKK 16.98), which corresponds to NOK 28.25 (NOK 21.91) for the combined FO farming and VAP segments. For 2019, the combined FO farming and VAP segments made an operational EBIT of DKK 1,166.7 million (DKK 943.2 million).
The FO farming segment made an operational EBIT of DKK 338.3 million (DKK 204.4 million) in Q4 2019. The harvested volumes and the achieved prices were higher in Q4 2019, compared to Q4 2018. For 2019, the operational EBIT was DKK 1,103.0 million (DKK 965.7 million).
The SCO farming segment made an operational EBIT of DKK 18.1 million in Q4 2019.
The VAP segment made an operational EBIT of DKK 36.6 million (DKK 3.3 million) for Q4 2019. For 2019, the operational EBIT was DKK 63.7 million (DKK -22.4 million).
The FOF segment (fishmeal, oil and feed) made an EBITDA of DKK 57.7 million (DKK 60.4 million) for Q4 2019, and the EBITDA margin was 17.1% (21.0%). The EBITDA was DKK 275.8 million for 2019 (DKK 254.3 million), corresponding to an EBITDA margin of 19.9% (20.0%).
During Q4 2019, Havsbrún sourced 35,180 tonnes (46,478 tonnes) of raw material, and for 2019, Havsbrún sourced 278,664 tonnes (302,465 tonnes) of raw material.
On 25 September 2019, Bakkafrost signed a Share Purchase Agreement to acquire 68.6% of the outstanding shares in the Scottish Salmon Company (SSC) from Northern Link Ltd. The closing date was 8 October 2019. Further acquirements in Q4 2019 resulted in Bakkafrost holding 95.6% of the shares at year end.
SSC is an integrated salmon farming business, operating exclusively in Scotland with 60 sites across the West Coast and Hebridean Islands. The company is engaged in nearly all stages of the value chain ensuring full traceability and total supply chain integrity. The current annual production capacity is 50,000 tonnes. SSC produced 33,799 tonnes gutted weight in 2019 and exported to 21 countries with a focus on North America and the Far East. SSC has developed a range of strong flagship brands, including Native Hebridean Salmon, Tartan Salmon Label Rouge and Lochlander Salmon. The company has 651 employees.
Bakkafrost chose to increase the company's share capital for the acquisition of SSC. The acquisition was therefore carried out without substantial increase in Bakkafrost's external financing.
Bakkafrost aims at giving the shareholders a competitive return on their investment, both through payments of dividends and by value growth of the equity through positive operations.
The long-term goal of the Board of Directors is that 30-50% of earnings per share shall be paid out as dividend. Bakkafrost's financial position is strong with a solid balance sheet, a competitive operation and available credit facilities. The Board of Directors proposes to the Annual General Meeting that DKK 8.31 (NOK 11.23*) per share shall be paid out as dividend. The Annual General Meeting will be convened on Friday the 3[rd] of April 2020.
The net interest-bearing debt amounted to DKK 1,018.7 million at the end of 2019 (DKK 495.5 million). Undrawn credit facilities amounted to DKK 2,470.0 million at the end of Q4 2019.
*The dividend per share in NOK is subject to changes depending on the exchange rate between NOK and DKK, which will be announced after the Annual