Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Salmon Evolution ASA (STU:60E, Financial) has demonstrated strong operational stability with excellent biological KPIs, including a superior grade share above 96% and low mortality rates.
- The company is progressing well with Phase 2 construction, which is expected to significantly increase production capacity and unlock further growth potential.
- Salmon Evolution ASA maintains a strong financial position, being fully funded for Phase 2, which will increase production to 18,000 tons.
- The company has achieved a high all-in price realization of NOK72 per kilo, despite low stocking rates and seasonal price fluctuations.
- The company is implementing over 50 specific initiatives to optimize and fine-tune operations, aiming to exceed current targets and leverage scaling effects from Phase 2.
Negative Points
- The group EBITDA for the third quarter was negative at NOK7.3 million, reflecting temporary low harvest volumes and seasonal price impacts.
- Biomass production has been impacted by small quality issues earlier in the year, affecting harvest weights and volumes in Q1 2025.
- The company faces challenges in maintaining flexibility in harvest timing due to industrial production constraints and capacity limitations.
- Salmon Evolution ASA has not yet entered into price hedging for salmon, which could expose the company to price volatility.
- The company is still in the planning phase for its North American expansion, with no concrete updates on project timelines or partners.
Q & A Highlights
Q: Are you tracking on 4 kilos harvest weights in Q4, or do you expect it to be higher by the end of Q4?
A: We are approximately at 4 kilos for the fish harvested so far. We have quite some volumes left for Q4 and are trying to hold back as much as possible to maximize price realization.
Q: Regarding the new zoning regulation in Norway, how much volume can you achieve beyond the 36,000 tons, and when will you apply for more licenses?
A: Phase 3 will come first, and we don't have permits beyond that yet. However, the potential increase is substantial, and we will provide more details in the future.
Q: How flexible are you with postponing the harvest? Can you delay it by three or four months if needed?
A: We cannot delay it that much. We have some flexibility due to available capacity, but once fully stocked, flexibility is limited as new fish continuously come in.
Q: Have you encountered issues like those faced by competitors with geosmin and turbidity?
A: No, we have not faced such issues. Our system uses a lot of water, which prevents these problems, and we consistently receive positive feedback on taste.
Q: Do you have plans to go all-female or take other measures to avoid fish maturity as you grow them larger?
A: We have had minimal issues with maturation, so it has not been a priority. Our current harvest weights are satisfactory without such measures.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
