24/10/2022 by Arild Stormer
The Salmon Farming Industry in Norway 2022 Report
The key highlights from the preliminary edition of Salmon Farming Industry in Norway 2022 report is now available.
The preliminary edition of the highly sought-after report The Salmon Farming Industry in Norway 2022 is now available!. The annual benchmark report is based on the financial accounts of companies in the Norwegian salmon farming industry and gives a thorough overview of the Norwegian salmon farming companies. Here are a couple of key highlights from this year's report:
1. Although export volumes dropped with 12% from the preceding year, higher prices lead to an increase in export value.
Sea temperatures in 2021 were on average lower than the preceding year, reducing the growth conditions for the Norwegian salmon-farming companies. The average harvest weight in 2021 ended at 4,90 kg (wfe).
Total harvest quantity of Atlantic salmon in Norway in 2021 increased by 12% compared to 2020, amounting to 1.532.100 tonnes (wfe). The harvest quantity for ocean-farmed trout was 8.200 tonnes (9%) lower in 2021, totalling 84.300 tonnes. Thus, total harvest quantity of salmonids in Norway in 2021 amounted to 1.616.400 tonnes, representing an increase of 154.900 tonnes (10,6%) compared to 2020.
The total export value of Atlantic salmon in 2021 amounted to NOK 81,3 billion, increasing by NOK 11,2 billion (16%) compared to 2020. With volumes increasing by 12%, the export value reached all-time high yet again in 2021. The export value of trout from Norway in 2021 was close to NOK 4 billion, increasing by NOK 0,2 billion (5%) from 2020. Although export volumes dropped with 12% from the preceding year, higher prices lead to an increase in export value.
2. Improved MAB utilisation
Average MAB utilisation for the period 2020-2021 increased slightly compared to the previous period (Large companies only). Amounting to 1.132 tonnes gutted weight, average harvest quantity per standard licence for the sample increased by 2,4% compared to 2019-2020. Within the sample of Large companies, the dispersion in MAB utilization is large, ranging from 534 to 1.540 tonnes per standard license.
Net sales for the 40 Large companies (6+ licenses) in the sample increased by 19%, and prices increased by 6,7% largely due to the recovery in HoReCa demand as a post pandemic reaction. The weighted average EBIT margin for these companies increased from 18,4% in 2020 to 18,8% in 2021. However, there were large variations in EBIT margin within the sample, ranging from –5% at the bottom to 35% at the top. For Large companies, EBIT per standard license and EBIT per tonnes MAB in 2021 inclined by 15% and 17%, respectively. Capital expenditures among the Large companies in the sample increased by 34% in 2021. Capex per kg harvest volume (hog) increased from 6,0 in 2020 to 7,2 in 2021, while average in 2012-2021 was 4,8 NOK/kg.
As for the 45 Small and Mid-sized companies (5 or less licenses) in the sample, net sales increased by 26% in 2021. The weighted average EBIT margin for Small and Mid-sized companies was 17,9% in 2021, inclining from 12,5% the preceding year. Within this sample there were large variations in EBIT margin, ranging from -34% to the highest recorded with 41%.
The smolt producers covered in this report, had sales reduction of-8% in 2021. Low Smolt yield performance, with the weighted average EBIT margin coming in at 8,4% in 2021, decreasing from 15,8% in 2020.
3. An improved financial performance for Norwegian exporters
The Norwegian export companies covered in the sample, recorded a 9% increase in sales in 2021 compared to the preceding year. The weighted average operating margin was 1,8% in 2021, slightly up from 1,6% in 2020.
4. 40% resource tax proposal from 2023 onwards, in addition to other increased taxes and valuations
In September 2022, the Norwegian government proposed the implementation of a 40% resource tax on salmon and trout producers. It is yet to be approved but is set to be effective from start of 2023. This tax does not affect companies producing less than 4.000 or 5.000 tonnes, and only applies to the sea-based grow-out phase, but there is uncertainties how it actually will affect the industry.
The valuation of non-time-limited licenses is from the income year 2022 defined as taxable assets. The licenses are valuated using the achieved auction prices in their related production areas.
Image: Shutterstock by Stanislav Simonyan