Quarterly Report
Q1 2024
Made by
nature
Pioneered by
Contents
Summary Q1 2024 | 7 |
Highlights Q1 2024 | 8 |
Key figures Q1 2024 | 10 |
2. Financial Performance | 10 |
2.1. Statement of Profit and Loss | 10 |
2.2. Balance Sheet | 11 |
2.3. Statement of Cash Flow | 11 |
2.4. Financial Position | 11 |
3. Operational Performance | 12 |
3.1. Farming | 12 |
3.2. Sales & Processing | 14 |
4. Outlook | 15 |
4.1. Farming Outlook | 15 |
4.2. Price (NASDAQ) | 16 |
5. Other Matters | 17 |
5.1. Lawsuit Against the State | 17 |
5.2. Demerger and Triangular Merger Process | 17 |
5.3. Complaint Regarding Exhibition License Accepted | 17 |
5.4. Western Seaproducts AS | 17 |
6. Events after the balance sheet day | 18 |
6.1. New harvesting facility | 18 |
6.2. Increased wellboat capacity | 18 |
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7. Consolidated Financial Statements | 19 |
7.1. Income statement | 19 |
7.2. Consolidated Statement of Other Comprehensive Income | 20 |
7.3. Statement of Financial Position | 21 |
7.4. Statement of Cash Flows | 23 |
7.5. Statement of Changes in Equity | 24 |
7.6. Notes to Consolidated Financial Statement | 25 |
Note 1: Basis for Preparation | 25 |
Note 2: Business Segments | 26 |
Note 3: Operating Revenue | 28 |
Note 4: Share Capital and Shareholders | 29 |
Note 5: Biological Assets and Other Inventories | 30 |
Note 6: Transactions with Related Parties | 32 |
Note 7: Intangible Assets and Property, Plant and Equipment | 33 |
Note 8: Tax | 34 |
Alternative Performance Measures | 35 |
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Made by
nature
Måsøval is a Norwegian fish farming pioneer. Ever since the company was founded in 1973, our dedicated employees have worked in close harmony with nature.
On the coast of central Norway, the Atlantic provides strong currents and high tidal rage, ensuring an abundance of fresh, clean seawater. It's here, in one of the most beautiful coastal landscapes in the world, that we make one of the best ingredients in the world - Salmon: Made by nature, pioneered by Måsøval.
Led by the third generation of the Måsøval family, we now look forward to producing more than 30 000 tonnes of salmon a year, serving 3.1 million people - every single week, year-round.
And even though we've already achieved a lot, we're still hungry for more
sustainable growth.
Pioneered by
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Summary
Q1 2024
Harvest volume (Tonnes GW)
Group operational EBIT (MNOK)
Operational EBIT pr kg (NOK) Farming Mid
7 573 | 7 927 |
7 037 | |
3 606
1 994
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
46.8
32.8 32.9
26.7
18.9
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
Operational EBIT pr kg (NOK) Farming West
23.5
18.1
9.4
12.4
8.2
Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
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Highlights Q1
2024
95.6 NOK/kg | ||||
3 606 tonnes | ||||
Harvest of 3 606 tonnes vs 1 994 | Average sales price of NOK 95.6 pr kg | |||
tonnes in Q1 2023 | (NOK 83.9 in Q1 23) |
46.8 NOK/kg | |||||
MNOK 121 | |||||
Group operational EBIT of | Farming Mid reported an operational | ||||
MNOK 121 (MNOK 36 in Q1 2023) | EBIT of NOK 46.8 pr kg (NOK 32.8 in Q1 | ||||
23) | |||||
12.4 NOK/kg
Farming West reported an operational
EBIT of NOK 12.4 pr kg (NOK 18.1 in Q1 23)
8 | 9 |
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Key figures
Q1 2024
2. Financial Performance
(Figures in brackets refer to Q1 2023, unless specified otherwise.)
2.1. Statement of Profit and Loss
Key figures Group
Consolidated numbers in 1 000 NOK | Q1 2024 | Q1 2023 | 2023 | ||
Sales revenues salmon | 383 | 057 | 208 745 | 2 279 560 | |
Other operating revenues | 19 | 199 | 28 519 | 120 788 | |
Operating revenue | 402 | 256 | 237 264 | 2 400 348 | |
Harvested volume (tonnes GW) | 3 | 606 | 1 | 994 | 24 531 |
Operational EBIT | 120 | 557 | 35 863 | 471 429 | |
EBIT (1) | 98 | 676 | -12 244 | 292 743 | |
Profit before tax | 54 | 430 | -39 592 | 164 240 | |
Net profit or loss for the period | 29 | 977 | -31 223 | -133 396 | |
Operational EBIT/kg | 33.4 | 18.0 | 19.2 | ||
Operational EBIT% | 30.0% | 15.1% | 19.6% | ||
Equity ratio | 36.4% | 38.2% | 34.8% | ||
Earnings per share (NOK) (2) | 0.32 | 0.02 | 1.45 |
- Op. EBIT adjusted for write-down, production tax, profit sharing co-locations and fair value adjustment biomass
- EPS excl. net fair value adjustment biomass and one-off implementation effects of resource rent tax
In the first quarter of 2024 operating revenues amount to MNOK 402, an increase from MNOK 237 same quarter last year. The increase in revenue is attributable to both a higher harvest volume (3 606 tonnes vs 1 994 tonnes) and higher average sales prices (NOK 95.6 pr kg vs NOK 83.9 pr kg).
In Q1 the Group achieved operational EBIT of MNOK 121, up from MNOK 36 Q1 last year.
After net financial expenses of MNOK 44 and net negative fair value adjustment of biomass of MNOK 6 the Group report a profit before tax of MNOK 54. Total tax expenses amount to MNOK 24, of which the estimated resource rent tax amounts to MNOK 12 in Q1 2024.
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2.2. Balance Sheet
At the end of Q1 2024, total assets amounted to MNOK 5 011, a decrease of MNOK 149 from the previous quarter. Total property, plant and equipment decreased by MNOK 69. Further, total current assets decreased by MNOK 110, dominated by a decrease in accounts receivables of MNOK 158. Biological assets, on the other hand, increased by MNOK 96 from the end of 2023 reflecting a 1 592 tonnes increase in biomass.
The Group's net interest-bearing debt decreased by MNOK 33 compared to the end of 2023 and amounted to MNOK 1 772 at end of the quarter. The decrease is mainly due to a positive cash flow from operating activities. A total of MNOK 1 365 have been restated from short term to long term debt at the end of Q1 2024 after resolving the breach of covenant in the part owned subsidiary Pure Norwegian Seafood at year end 2023.
At the end of the reporting quarter, the Group's total equity was MNOK 1 824. Equity increased by MNOK 30 compared to the yearend 2023.
2.3. Statement of Cash Flow
Operating activities yielded a positive cash flow of MNOK 77 for the Group in Q1 2024. Accounts receivables reduced by MNOK 158 resulting in a positive cash flow effect after seasonal high sales at the end of 2023. While the build-up of biomass had a negative effect on operational cash flow amounting to MNOK 124 before fair value adjustments.
Investing activities had a negative cash flow effect amounting to MNOK 26.
Financial activities had a negative effect on cash flow with an effect amounting to MNOK 50. Repayment of borrowings, leases and interest amounted to MNOK 95. Repayments was partly balanced by a net change in overdraft facilities amounting to MNOK 45.
2.4. Financial Position
In Q1 2024 the equity ratio increased due to total assets decreasing MNOK 149 and a net profit of MNOK 30. The equity ratio ended the quarter at 36.4%, up from 34.8% last quarter.
After reclassification to short term liabilities at year end 2023 based on a breach of loan covenants in the part owned subsidiary Pure Norwegian Seafood the Groups bank financing is again classified as a long-term liability end of Q1 2024. The Group also have large unused bank financing facilities.
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3. Operational Performance
The Group's management monitors and allocates resources to the Group's business activities as two operating segments, i.e. Farming and Sales & Processing. In addition, Farming is measured on Farming Mid and Farming West as two divisions. Overhead, related HQ costs, depreciation related to surplus values from acquisitions and intra- segment transactions are reported as Other/Eliminations. See note 5 to the consolidated financial statement for further details.
3.1. Farming
(Figures in brackets refer to Q1 2023, unless specified otherwise.)
Key figures Farming
Consolidated numbers in 1 000 NOK | Q1 2024 | Q1 2023 | 2023 | |||
Total operating revenues | 366 | 165 | 190 | 040 | 2 189 | 016 |
Operational EBIT | 164 | 174 | 52 | 827 | 554 | 531 |
Operational EBIT -% | 44.8% | 27.8% | 25.3% | |||
Harvested volume (tonnes GW) | 3 | 606 | 1 | 994 | 24 | 531 |
Operational EBIT per kg salmon | 45.5 | 26.5 | 22.6 |
Farming is the Group's largest segment and achieved sales revenues of MNOK 366 of which MNOK 345 is sale of salmon. Increased harvested volume and higher average sales price than in Q1 2023 led to an increase in sales revenue of MNOK 176. Operational EBIT in Q1 2024 amounted to MNOK 164 (MNOK 53). Operational EBIT per kg harvested salmon was NOK 45.5 (NOK 26.5).
During Q1 the Group built biomass in order to reach full MAB utilisation, in a period with low sea temperatures. Harvesting was moderate while biological performance during the quarter was strong. The group ended the quarter with a biomass of 13 457 tonnes of which 7 705 tonnes had an average weight exceeding 4 kg indicating a high harvest volume potential for Q2.
Jelly fish had a negative effect on price achievement in the quarter but no material impact on mortality. Harvesting decision in Måsøval is guided by fish welfare and thus the fish with most ulcers was harvested first. This resulted
in low superior share during Q1. The jelly fish have affected the entire industry resulting in larger price differential between superior grade and production grad this year.
As a consequence of good biological performance fish and a tight cost focus, released from stock cost at a lower level. We see continuing low costs into Q2 harvesting primarily at same sites as Q1.
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3.1.1. Farming Mid
Key figures Farming Mid
Consolidated numbers in 1 000 NOK | Q1 2024 | Q1 2023 | 2023 | |||
Total operating revenues | 354 | 743 | 124 | 527 | 1 548 | 274 |
Operational EBIT | 162 | 463 | 37 | 363 | 432 | 454 |
Operational EBIT% | 45.8% | 30.0 | 27.9% | |||
Harvested volume (tonnes GW) | 3 | 468 | 1 | 140 | 16 | 886 |
Operational EBIT per kg salmon | 46.8 | 32.8 | 25.6 |
Farming Mid is the Group's largest division and achieved sales revenues of MNOK 355 in Q1 2024, of which MNOK 334 is sale of salmon. Farming Mid's average sales price was NOK 6.3/kg higher in comparison with Q1 2023 and harvested volume increased by 2 329 tonnes. Operational EBIT in Q1 2024 was MNOK 162 (MNOK 37). Operational EBIT per kg harvested salmon was NOK 46.8 (NOK 32.8).
3 468 tonnes of salmon (1 140 tonnes) were harvested in Q1 2024. 100% of harvested volume was from generation Spring 2023.
Operationally Q1 was a quarter with strong sea production and a moderate harvesting volume, resulting in building biomass during the quarter.
3.1.2. Farming West
Key figures Farming West
Consolidated numbers in 1 000 NOK | Q1 2024 | Q1 2023 | 2023 | ||
Total operating revenues | 11 421 | 65 | 512 | 640 | 724 |
Operational EBIT | 1 711 | 15 | 463 | 122 | 077 |
Operational EBIT% | 15.0% | 23.6% | 19.1% | ||
Harvested volume (tonnes GW) | 138 | 854 | 7 | 645 | |
Operational EBIT per kg salmon | 12.4 | 18.1 | 16.0 |
Farming West achieved sales revenues of MNOK 11 in Q1 2024, all the revenue is related to the sale of salmon. Farming West's average sales price was NOK 5.0/kg higher in comparison with Q1 2023. Compared to Q1 2023 harvested volume decreased by 716 tonnes. Operational EBIT amounted to MNOK 2 (MNOK 15). Operational EBIT per kg harvested salmon was NOK 12.4 (NOK 18.1).
138 tonnes of salmon (854 tonnes) were harvested in Q1 2024. 100% of the harvest was from 2023 generations. The fish was harvested early in the quarter from the same site as in Q4 2023 and was thus harvested due to fish health considerations. Harvesting on low average weight impact cost and price achievement. The remaining fish at the site have experienced stable fish health situation and good appetite.
Operationally Q1 was a quarter with strong sea production, combined with low harvesting volume which resulted in building biomass during the quarter also for Farming West.
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3.2. Sales & Processing
Key figures
Consolidated numbers in 1 000 NOK | Q1 2024 | Q1 2023 | 2023 | |
Total operating revenues | 401 223 | 229 363 | 2 377 | 349 |
Operational EBIT *) | -23 979 | 843 | 11 | 839 |
Operational EBIT% | -6.0% | 0.4% | 0.5% |
*) Including a one-off effect in Q1 2024 due to a loss of MNOK 15 regarding a sale of the harvesting facility Western Seaproducts
The Sales & Processing segment achieved sales revenues of MNOK 401 in Q1 2024, vs. MNOK 229 in Q1 2023.
The Group realised a loss of MNOK 15 due to the sale of the harvesting facility Western Seaproducts AS in Vartdal. Handling the special circumstances in the subsidiary Pure Norwegian Seafood generated extraordinary costs to recall sold products, legal assistance and internal investigations in the quarter. In total this led to a negative operational EBIT for the segment of MNOK 24.0 in Q1 2024.
Spot exposure in the quarter was high - in line with the Group's strategy.
Sales Volume (tonnes GW)
7 788 | 7 989 |
7 103 | |
3 611
2 270
Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 |
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4. Outlook
4.1. Farming Outlook
Full year Harvest volume is estimated at 27.000- 28.000 GWT for the Group, this figure includes an estimated 5-10% of the total volume harvested on the Frøya Laks co-location agreement. Around 75-80% of the annual harvest volume is expected to be harvested in region mid.
In Q2 the Group expect to harvest 7.500 - 8.000 GWT, this figure includes harvesting on the Frøya Laks co-location agreement. Around 75% of the volume is expected to be harvested in region mid.
Cost is expected to rise marginally from a very low level in Q1.
Harvest Volume (tonnes GW)
Fully utilized Måsøval has a potential to produce around 29.000 GWT on the current license portfolio. In addition, the Exhibition license have a potential of 5-600 GWT and the co-location agreement with Frøya Laks adds a volume of 4000 GWT when fully utilized.
Harvest Volume 1 000 GWT
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4.2. Price (NASDAQ)
The average salmon price for superior grade salmon is expected to rise in Q2 2024 compared to Q2 2023. During the quarter fish pool prices for the remaining quarter in 2024 have risen. Fish Pool prices for Q2 2024 are currently trading at NOK 122 and the average price for 2024 is NOK 100.
NASDAQ average price (NOK/kg)
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5. Other Matters
5.1. Lawsuit Against the State
Måsøval AS filed a lawsuit against the State, claiming compensation of MNOK 29.8 for the losses the company incurred after the facility Kattholmen was misdiagnosed with PD SAV3 in August 2019. The case went to trial in November 2023.
On 23 December 2023, a judgement was rendered in the case, which was served to the parties on 29 December 2023. The court's conclusion is that the State, represented by the Ministry of Trade, Industry, and Fisheries, is ordered to pay Måsøval MNOK 12.8 in compensation for loss of earnings and incurred expenses as a result of the misdiagnosis, plus accrued interest and delay interest. Costs incurred from the trial have been booked, while no compensation have been accrued as income because of the verdict.
The State appealed the verdict on 2 February 2024 and Måsøval submitted an independent appeal in the case 5 February 2024. The case will go before the Court of Appeal in June 2024.
5.2. Demerger and Triangular Merger Process
A condition for completion of the Internal Reorganization is that the Company receives a binding advance tax ruling ("BFU") from the tax authorities confirming that the Internal Reorganization can be completed with tax continuity. The Company has received a BFU where the tax authorities conclude that the outlined deduction of assets acquired in 2023 means that the Internal Reorganization cannot be carried out with tax continuity. The deduction has limited value for the Company, and therefore the Company has requested a new binding advance ruling from
the tax authorities. Subject to such confirmation from the tax authorities, the Internal Reorganization will then be implemented.
5.3. Complaint Regarding Exhibition License Accepted
Måsøval Lisens AS, a wholly-owned subsidiary of Måsøval AS, filed a complaint on 2 March 2020 to the Ministry of Trade, Industry and Fisheries, against the Directorate of Fisheries rejection on 11 February 2020, of their application for an exhibition license. On 23 February 2024, the Ministry has informed Måsøval Lisens AS that the complaint has been accepted and that a permission can be given for an exhibition license of 780 tonnes MAB for a period of 10 years from the issuance of the permit document. The Directorate of Fisheries will supplement the Ministry's decision by formulating appropriate conditions in light of the Ministry's assessments and conclusions. It will take time before an exhibition license can potentially be applied, and there will be uncertainty regarding whether it can be used depending on the final conditions from the Fisheries Directorate and other sector authorities, and whether Måsøval Lisens AS can fulfil those.
5.4. Western Seaproducts AS
Western Seaproducts AS, a fully owned subsidiary of the group, was sold to Ode ASA in February. A seller credit was issued to the buyer with a maturity of 5 years. The buyer has committed not to harvest any salmon at the processing plant.
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6. Events after the balance sheet day
6.1. New harvesting facility
In January Mowi ASA accepted the bid from Måsøval AS to acquire the harvesting facility at Ulvan in Hitra Municipality. The process is now finalized and Måsøval has signed the final contract and has taken over the harvesting facility in May. Måsøval's intention with the acquisition is to continue the harvesting operations and develop the facility to increase the harvesting capacity within the Group. Planned start up is end of 3rd quarter 2024.
6.2 Increased wellboat capacity
The Group entered into a time charter agreement with Njord Kya AS for the wellboat "MS Njord Kya" which is currently under construction and is expected to be operational by the end of 2024. Term of the charter party is for 3 years with options of 2 x 2 years.
Måsøval is thus increasing the wellboat capacity within the group to meet the company's production targets, as well as to ensure that the best solutions are available in respect of fish welfare and quality.
Måsøval looks forward to putting the new wellboat into operation. The vessel ensures additional capacity and with new technical features that are important for Måsøval such as combination sealice treatments with freshwater and Thermolicer continuously and without bottlenecks, in addition with sorting that can be done efficiently and gently in a vacuum.
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7. Consolidated Financial Statements
7.1. Income statement
(All amounts in NOK 1000) | Note | Q1 2024 | Q1 2023 | 2023 | ||
Operating revenues - sale of salmon | 3,6 | 383 057 | 208 | 745 | 2279 | 560 |
Other operating income | 3,6 | 19 199 | 28 | 519 | 120 | 788 |
Total operating revenues | 402 256 | 237 | 264 | 2400 | 348 | |
Cost of goods sold | 72 738 | 38 | 119 | 1165 | 918 | |
Salaries and other personnel costs | 68 967 | 61 | 317 | 242 | 882 | |
Depreciation and amortisation expense | 7 | 49 461 | 47 | 610 | 194 | 773 |
Other operating expenses | 6 | 90 533 | 54 | 356 | 325 | 346 |
Total operating expenses | 281 699 | 201 | 401 | 1 928 | 918 | |
Operational EBIT | 120 557 | 35 | 863 | 471 | 429 | |
Write-down | - | - | -43 955 | |||
Production tax | 8 | -3 372 | -2 233 | -18 824 | ||
Profit sharing with co-location partners | -11 764 | -2 760 | -24 627 | |||
Net fair value adjustment - Biological asset | 5 | -6 745 | -43 113 | -91 281 | ||
EBIT | 98 676 | -12 244 | 292 | 743 | ||
Financial income | 3 851 | 3 | 909 | 25 | 543 | |
Financial expenses | 48 097 | 31 | 257 | 154 | 046 | |
Net finance income and expense | -44 246 | -27 348 | -128 503 | |||
Profit before income tax | 54 430 | -39 592 | 164 | 240 | ||
Tax expense | 8 | 24 454 | -8 369 | 297 | 636 | |
Net profit for the period | 29 977 | -31 223 | -133 396 | |||
Attributable to | ||||||
Equity holders of the parent company | 33 994 | -31 267 | -135 901 | |||
Non-controlling interests | -4 017 | 44 | 2 | 505 | ||
Total allocations | 29 977 | -31 223 | -133 396 | |||
Earnings per share (basic and diluted)* | 0.32 | 0.02 | 1.45 |
* Earnings per share excludes Net fair value adjustment - biological assets
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Masoval AS published this content on 23 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 May 2024 17:15:03 UTC.