Release Date: November 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Icelandic Salmon AS (STU:I6X, Financial) successfully stabilized the biology after a challenging winter and spring, leading to good growth in biomass.
- The company introduced two new vaccines to reduce the risk of biological incidents, showing proactive measures in health management.
- There was an increase in harvest volume compared to the previous quarter, with expectations for continued growth into the next quarter.
- Sales and marketing efforts resulted in good price achievements, with increased sales to North America and Asia.
- The company has a long-term ambition to increase production to 26,000 tons per year, supported by a robust corporate culture and competent staff.
Negative Points
- The EBIT for the quarter was negative EUR 3 million, affected by low revenues due to low volume and high costs.
- A 10,000-ton license for sterile salmon was revoked, impacting potential future operations.
- The equity ratio decreased to 54% due to weaker operational results and increased net interest-bearing debt.
- Biological challenges in the first half of the year will affect harvest volumes in 2025, with a lower than hoped 15,000-ton target.
- The company faces uncertainty regarding new law proposals due to political disagreements and upcoming elections, affecting future operations.
Q & A Highlights
Q: How many smolts will you release in 2024 and 2025 respectively?
A: For 2024, we ended at approximately 5 million smolts. We will not provide guidance on the smolts output for next year, but we expect an increase compared to this year. - Unidentified_1
Q: Is your smolt yield assumption substantially different in 2025 versus 2024?
A: I would not say substantially different. We plan to have most of the harvest in the second half of the year to utilize our maximum load biomass effectively, similar to this year. - Unidentified_1
Q: Will the revocation of your license impact the potential of reaching 26,000 tons?
A: The sterile license in the east is not part of the plan to reach 26,000 tons. It would be additional volume if we get the license and decide to do sterile production, so it will not affect the 26,000-ton target. - Unidentified_1
Q: When are you expecting to reach the 26,000 tons on the current licenses?
A: We haven't specified an exact year, but we expect it to happen in the coming years. We are working hard towards that goal. - Unidentified_1
Q: Are you worried about the string jellyfish as a challenge in Iceland?
A: We have been observing the situation in Norway and conducted research on the presence of string jellyfish. There is no documentation of it appearing in Iceland historically. We will continue to monitor this going forward. - Unidentified_1
Q: How far down the line do you expect to see the effect of the biological challenges experienced in the first half of this year?
A: It will affect the 2025 volumes, which are lower than hoped for at 15,000 tons. However, nothing has occurred so far that should affect the 2026 volumes, so we should be back on track by then. - Unidentified_1
Q: What is the level of resource taxes in Iceland today?
A: The resource tax is 3%, calculated from prior year average prices. With full implementation, it will be 4.3% in 2026. For the first six months of this year, we paid approximately EUR 860,000 for 3,700 tons harvested. - Unidentified_2
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
