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Bakkafrost turns in mixed quarter on lower harvest volumes

All divisions end third quarter in the black, however, despite some headwinds.

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Faroese salmon and feed producer Bakkafrost on Tuesday reported a decline in operating earnings in the third quarter, the result of a decline in salmon prices compared with the year prior and a significantly lower harvest.

Operational earnings before interest and taxation (EBIT) was at DKK 168 million (€22.5 million/$25.7 million) on the quarter, down 33 percent from DKK 252 million (€33.8 million/$38.5 million) in the same quarter last year.

Revenues, meanwhile, were at DKK 622 million (€83.4 million/$95.1 million), down 22.6 percent from the same quarter last year.

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Net profit on the period told a much better story for the company, with DKK 356 million (€47.7 million/$54.4 million) booked, nearly five times the same period last year, in part from a fair value adjustment of biomass due to higher salmon prices.

Bakkafrost harvested significantly less fish in the third quarter compared with last year. The overall 7,217 metric tons harvested was 38 percent down from the comparable period.

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Operational EBIT for the farming segment was at DKK 140 million (€18.8 million/$21.4 million), down 35.5 percent from the year prior. Revenues also declined significantly, to DKK 445 million (€59.7 million/$68 million), down 28 percent.

The company was hit by an agal bloom in mid-September that resulted in a loss of around 700,000 smolts, but the incident was contained.

Value-added operations returned to the black in the third quarter as a result of the softer salmon prices, posting a 4 percent EBIT margin on a sharply lower DKK 69 million (€9.2 million/$10.6 million) in revenues. The company remains in the red on the division, however, through the first nine months of the year.

Fishmeal, oil and feed operations, under the company's Havsbrun umbrella, reported an EBITDA of DKK 41 million (€5.5 million/$6.3 million), roughly half the level from the same quarter last year, on DKK 354 million (€47.5 million/$54.1 million) in revenues. Overall feed volume sold was 23,468 metric tons.

Fishmeal prices rose in the third quarter, and are now near 2016 levels, the company noted.

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