Best quarterly result in the history of Norway Royal Salmon

Norway Royal Salmon (NRS) reports the highest quarterly result and margins
in the history of the group.

Norway Royal Salmon

Operational EBIT for the first quarter of 2016 was MNOK 153 and EBIT per kg was NOK 25.54. Corresponding figures for the same quarter last year were MNOK 69 and NOK 10.31.

- The reason for the good quarterly result is very high salmon prices as well as low and stable production costs from the previous quarter in Region North, says CEO Charles Høstlund.

The result before tax for the first quarter was MNOK 253, after a gain on fair value adjustments of MNOK 3 and a gain from financial assets of MNOK 87 were recognized. Earnings per share before fair value adjustments was NOK 4.72 for the quarter.

Cash flow from operational activities was MNOK 203 in the quarter. The Group's net interest bearing debt decreased by MNOK 227 to MNOK 272 during the quarter. Equity increased by MNOK 177 in the quarter to MNOK 1 364, which equates an equity ratio of 45.8 per cent.

Region North

Region North posted an operational EBIT of MNOK 173.3 in the quarter, compared with MNOK 64.1 in the corresponding quarter last year. Operational EBIT per kg gutted weight was NOK 26.66, compared with NOK 10.21 in the corresponding quarter last year.

Region South

Region South posted an operational EBIT of MNOK 10.8 in the quarter, compared with MNOK 13.3 in the corresponding quarter last year. Operational EBIT per kg gutted weight was NOK 15.26, compared with NOK 10.83 in the corresponding quarter last year.

NRS harvested 7 209 tonnes gutted weight during the quarter, 4 per cent less than in the same quarter last year. 500 tonnes that was planned harvested in the first quarter will be harvested in the first part of the second quarter instead. 501 tonnes of the total volume was harvested in Region North and 708 tonnes in Region South. Estimated harvest volume for 2016 is 500 tonnes. The sales business sold 15 874 tonnes during the quarter. The sales business had a good price achievement in the quarter.

Charles Høstlund, CEO Norway Royal Salmon

ASC CERTIFICATION

- In February another five sites at NRS Finnmark received ASC (Aquaculture Stewardship Council) certification. NRS are very pleased that seven out of twelve sites in Finnmark are certified by the strictest international environmental standards in the industry. ASC is a global standard for responsible farming and will together with our green licenses further reduce the influence on the environment and the society, says Charles Høstlund.

In the quarter, NRS acquired the minority shares of 33.33 per cent in the subsidiary Nord Senja Laks AS for a cash consideration of MNOK 70. Following the transaction, NRS owns 100 per cent of the shares in the subsidiary. The rationale behind the transaction is to consolidate NRS's farming operations in Region North in order to increase cost efficiency going forward. The transaction fortifies NRS's position in Troms, an important future growth area for the salmon farming industry.

 

HIGHEST SPOT PRICE LAST 20 YEARS

The salmon price in the quarter is the highest spot price registered in a quarter the last 20 years. The global supply growth is expected to be negative in the area of 5 to 8 per cent for 2016 and in the long term, the global supply growth is expected to continue to be low. This provides the basis for a positive market outlook for 2016 and in the long term for the industry.

- In March, NRS and Aker ASA applied for 15 development licenses for farming of salmon. Together, the companies have developed a semi-submersible offshore farm designed for harsh environments. By combining NRS' aquaculture knowledge with Aker's offshore competency, the objective is to further develop a profitable aquaculture industry and help to solve the environmental and area scarcity challenges facing the industry, says Charles Høstlund.


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