Release Date: August 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Icelandic Salmon AS (OISE:ISLAX, Financial) has implemented new procedures for lice control and introduced new vaccines, which have shown promising results in mitigating biological challenges.
- The company received a new license for 10,000 tonnes of sterile salmon, expanding its operational capacity.
- There is continued strong demand for Icelandic Salmon in the market, with the product being recognized for its high quality and sustainability.
- The company has a strong financial position with an equity ratio of 65% and compliance with all covenants.
- Icelandic Salmon AS (OISE:ISLAX) is focusing on growth and investments to handle operations more efficiently and utilize its licenses further.
Negative Points
- The company faced significant biological challenges in the second quarter, resulting in a negative operational EBIT of EUR3.8 million.
- Harvest volumes were low, with only 702 tonnes harvested compared to 88 tonnes in the same quarter of the previous year.
- The biological challenges led to a high mortality rate, affecting future harvest volumes, particularly for 2025.
- The reassessment of stock value due to biological challenges impacted EBIT by EUR2.3 million.
- There was a decrease in demand in the North American market, with only 11% of volume sold to the US compared to 18% for the full year 2023.
Q & A Highlights
Q: Can you elaborate on the biological challenges faced and how they impacted the financial results?
A: Bjorn Hembre, CEO: The biological challenges, including infectious diseases, led to increased mortality and economic consequences, impacting our operational EBIT negatively by EUR3.9 million. These challenges also resulted in a reassessment of biological inventories, affecting our financial performance significantly.
Q: What measures have been implemented to address these biological challenges?
A: Bjorn Hembre, CEO: We have introduced new procedures to avoid POX-virus outbreaks and implemented a new vaccine program, adding vaccines against ISA and winter wounds. These measures have been successful so far, and we are optimistic about improved performance going forward.
Q: How has the company's financial position been affected by these challenges?
A: Jonas Birgisson, CFO: The balance sheet reflects the reassessment and operational challenges, with a total impact of EUR7.5 million. Despite these challenges, the group maintains a strong financial position with an equity ratio of 65% and compliance with all covenants.
Q: What is the outlook for harvest volumes in the coming quarters?
A: Bjorn Hembre, CEO: We have reduced the volume guidance for 2024 to 13,000 tonnes to optimize biomass utilization. The harvest volume in the second half will increase significantly compared to the first half, but the biological challenges will affect 2025 volumes.
Q: Can you provide an update on the company's market strategy, particularly in North America?
A: Bjorn Hembre, CEO: We continue to focus on the North American market, leveraging our attractive carbon footprint and logistics solutions. Although demand has decreased recently, we believe in the potential of our product for American consumers and will continue to work towards this market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
