Executive Summary
In the fourth quarter of 2023, SalMar ASA reported significant financial results with a total revenue of NOK 8.02 billion, marking a 25.2% year-over-year growth, driven by record-high harvest volumes despite challenges such as jellyfish impacts in Northern Norway and biotic stress in Iceland. The net income surged to NOK 1.32 billion, a substantial turnaround compared to the same quarter last year and year-to-date earnings show impressive growth largely attributed to strategic acquisitions and operational efficiency improvements. Management is optimistic about continuing this positive trend into 2024, projecting a reduced yet robust harvest guidance, addressing operational challenges while maintaining strong pricing and demand for salmon in global markets.
Key Performance Indicators
QoQ: -56.97% | YoY:24.02%
QoQ: -34.36% | YoY:537.83%
QoQ: 32.44% | YoY:844.65%
QoQ: 107.90% | YoY:814.29%
Key Insights
**Revenue**: NOK 8.02 billion (QoQ increase of 6.75%, YoY increase of 25.19%)
**Net Income**: NOK 1.32 billion (QoQ increase of 32.44%, YoY increase of 844.65%)
**EBIT Margin**: NOK 2.16 billion total operational EBIT at a margin of NOK 26 per kilo (decrease from previous quarter due to increased costs)
**EPS**: NOK 10.00 (significant increase from previous year's results)
Key changes were attributed to operational challenges leading to increased costs and some negatively impacti...
Financial Highlights
Revenue: NOK 8.02 billion (QoQ increase of 6.75%, YoY increase of 25.19%)
Net Income: NOK 1.32 billion (QoQ increase of 32.44%, YoY increase of 844.65%)
EBIT Margin: NOK 2.16 billion total operational EBIT at a margin of NOK 26 per kilo (decrease from previous quarter due to increased costs)
EPS: NOK 10.00 (significant increase from previous year's results)
Key changes were attributed to operational challenges leading to increased costs and some negatively impacting volume in Northern Norway and Iceland, which resulted in significant one-off effects contributing to overall elevated cost levels.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
8.02B |
25.19% |
6.75% |
| Gross Profit |
2.05B |
24.02% |
-56.97% |
| Operating Income |
1.74B |
537.83% |
-34.36% |
| Net Income |
1.32B |
844.65% |
32.44% |
| EPS |
10.00 |
814.29% |
107.90% |
Key Financial Ratios
operatingProfitMargin
21.7%
operatingCashFlowPerShare
$15.68
freeCashFlowPerShare
$11.44
Management Commentary
Operational Challenges:
CEO Frode Arntsen emphasized the substantial jellyfish attacks in Northern Norway impacting fish welfare and operational capacity. 'We were required to cull fish at multiple locations and harvest fish much earlier than planned to avoid further issues with the jellyfish.'
Financial Performance Highlights:
'CFO Ulrik Steinvik noted a substantial increase in EBITDA to NOK 9.5 billion driven by operational efficiencies and sound market conditions, despite the challenges faced, marking our first full year integrating the acquisitions made last year.'
Market Outlook:
Arntsen also stated, 'The end of 2023 was a minor hiccup but does not alter our growth potential. There is a strong market for our salmon out there, and we expect to continue to realize the potential within our licenses.'
"Our people put in an enormous effort when such events occur... as CEO, I am proud of this, and it shows what resides within us."
â Frode Arntsen
"Despite the challenges we experienced in Norway in 2023, this does not affect the potential inherent in our licenses and our value chain."
â Frode Arntsen
Forward Guidance
Management forecasts a revised volume expectation of 237,000 tons in Norway while maintaining previous guidance levels in other segments. This adjustment acknowledges the operational struggles faced but retains positive projections for global salmon demand, further emphasizing the need for improved operational conditions and cost efficiencies. Continued strong demand in various markets has led to the expectation of better pricing moving into 2024. Investors are advised to focus on the company's ability to navigate operational challenges and capitalize on growth opportunities in the coming year.