29/11/2021 by Knut Henrik Rolland
The Salmon Farming Industry in Norway 2021 Report
How did the salmon farming industry fare in 2020? The key highlights from the final edition of Salmon Farming Industry in Norway 2021 report is now available.
The final edition of the highly sought-after report The Salmon Farming Industry in Norway 2021 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 six key highlights from this year's report:
1. With prices dropping amid decline in HoReCa demand due to the pandemic, total export value in 2020 decreased despite volumes continued growing
Sea temperatures in 2020 were on average higher than the preceding year, yielding better growth conditions for the Norwegian salmon-farming companies. The average harvest weight in 2020 ended at 4,74 kg (wfe), similar to 2019.
Total harvest quantity of Atlantic salmon in Norway in 2020 increased by 2,7% compared to 2019, amounting to 1.369.100 tonnes (wfe). The harvest quantity for ocean-farmed trout was 14.200 tonnes (18%) higher in 2020, totalling 92.500 tonnes. Thus, total harvest quantity of salmonids in Norway in 2020 amounted to 1.461.600 tonnes, representing an increase of 49.800 tonnes (3,5%) compared to 2019.
The total export value of Atlantic salmon in 2020 amounted to NOK 70,1 billion, decreasing by NOK 2,5 billion (3%) compared to 2019. Despite export volumes increasing by 2%, the export value declined due to lower prices, largely explained by the drop in demand from the HoReCa segment amid the pandemic. The export value of trout from Norway in 2020 was close to NOK 3,8 billion, increasing by NOK 0,2 billion (5%) from 2019. Although prices dropped from the preceding year, 19% higher export volumes lead to growth in export value.
2. Improved MAB utilisation
Average MAB utilisation for the period 2019-2020 decreased slightly compared to the previous period (Large companies only). Amounting to 1.106 tonnes gutted weight, average harvest quantity per standard licence for the sample decreased by 0,7% compared to 2018-2019. Within the sample of Large companies, the dispersion in MAB utilization is large, ranging from 561 to 1.545 tonnes per standard license.
3. Norwegian salmon farmers coping fairly well with the challenges faced during the pandemic, achieving healthy margins seen in a historical context
Despite higher volumes, net sales for the 40 Large companies (6+ licenses) in the sample decreased by 3,4% as prices declined largely due to the drop in HoReCa demand amid the pandemic. The weighted average EBIT margin for these companies decreased from 25,6% in 2019 to 18,4% in 2020. However, there were large variations in EBIT margin within the sample, ranging from –29,7% at the bottom to 36,9% at the top. For Large companies, EBIT per standard license and EBIT per tonnes MAB in 2020 declined by 33% and 34%, respectively. Capital expenditures among the Large companies in the sample increased by 7% in 2020. Capex per kg harvest volume (hog) increased from 5,7 in 2019 to 6,0 in 2020, while average in 2011-2020 was 4,3 NOK/kg.
As for the 45 Small and Mid-sized companies (5 or less licenses) in the sample, net sales decreased by 12% in 2020. The weighted average EBIT margin for Small and Mid-sized companies was 12,5% in 2020, declining from 26,3% the preceding year. Within this sample, there were eight companies with negative EBIT margin, whereas the highest recorded was 38,1%.
4. The trend with larger smolt yields strong financial performance for smolt producers
The smolt producers covered in this report, recorded sales growth of 21% in 2020. The trend with larger smolt yields better performance for the smolt producers, with the weighted average EBIT margin coming in at 15,8% in 2020, increasing from 13,5% in 2019.
5. A slight drop in financial performance for Norwegian exporters
The Norwegian export companies covered in the sample, recorded a 3% drop in sales in 2020 compared to the preceding year. The weighted average operating margin was 1,6% in 2020, slightly down from 1,7% in 2019.
6. Production tax of 0.40 NOK per kg. from 2021 onwards
In May 2020, the Norwegian government proposed a production tax of 0.40 NOK per kg. (hog) for Norwegian salmon farming companies. The production tax was given effect from 1st January 2021 and tax payments are due in 2022.
Image: Shutterstock by Marius Dobilas