A long-running strike by workers on the Faroe Islands has resulted in costly costs for salmon farmer Bakkafrost.
The company said the measures taken in the spring of this year had severely impacted its second quarter (April to June) results, in part because the planned harvest had to be postponed until after the strike, when the salmon market experienced a significant drop in prices.
But Bakkafrost has also made great progress in Scotland, leading to higher sales and profits.
As a result of the months-long strike, Bakkafrost was able to harvest 4,000 tonnes after the strike at significantly lower prices and with smaller harvest volumes than planned for the quarter.
CEO Regin Jacobsen said he was not satisfied with the financial performance during this period, but was very pleased with the company's current operational situation in both Scotland and the Faroe Islands.
Bakkafrost generated significantly higher sales and profits in Scotland. Sales amounted to 880 million Danish kroner (DKK) or 100 million pounds compared to 587 million DKK (66.7 million pounds) in the previous year, while operating EBIT or profit was 113 million DKK (12 million pounds) compared to 71 million DKK (8 million pounds) in the previous year.
Faroe Islands revenue was DKK 1,187 million (£134 million), compared to DKK 1,082 million (£123 million) in the second quarter of 2023, and operating EBIT or profit was DKK 275 million (£31 million), down from DKK 282 million (£32 million) a year earlier.
Bakkafrost CEO Regin Jacobsen
'Robust growth in the Faroe Islands and Scotland
CEO Jacobsen said he was satisfied with the current operational situation, especially with the Faroe Islands’ freshwater division, where both efficiency and the production of high-quality smolts are steadily improving.
An outbreak of infectious salmon anaemia (ISA) in the Faroe Islands has been effectively contained, underlining the importance of robust farming practices and risk management procedures, he added.
He continued: “We are also satisfied with the condition of the biomass in the Faroe Islands and Scotland. Growth is robust; there are no problems with sea lice at either site and gill health in Scotland is well controlled.
“Our risk minimisation strategy for marine farming in Scotland has been effective, resulting in significantly fewer biological problems and lower mortality than in previous years.
“With 75% of the planned harvest for this year already harvested in Scotland, we have mitigated the risk for the third quarter as planned.
“The ramp-up at the Applecross hatchery in Scotland is progressing well after issues with the cooling system identified in the first quarter of 2024 were resolved. We expect to achieve an average smolt weight of over 200 grams in Scotland by the fourth quarter of 2024.”
Bakkafrost also confirmed its decision to close the Marybank processing plant in Stornoway on the Isle of Lewis and relocate production to Cairndow.
Bakkafrost Scotland Farm, Loch Roag, Lewis
