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Investing.com -- Bakkafrost (OL:BAKKA) shares sank over 14% on Wednesday after the salmon farmer reported a first-quarter loss and flagged continued pressure on margins from lower salmon prices and rising global supply.
The Faroe Islands-based company posted a net loss of DKK 6 million for the first quarter of 2025, compared with a profit of DKK 401 million a year earlier.
Operating revenue declined 14% to DKK 1.9 billion, while operational EBIT dropped 29% to DKK 505 million.
Salmon reference prices for 4–5 kg superior fish were 18.1% lower year-on-year, pressured by a 5.3% increase in global supply, or 8.4% excluding inventory effects, according to estimates cited in the company’s report.
In the Farming Faroe Islands segment, operational EBIT fell 39% to DKK 287 million, with EBIT per kg halving to DKK 15.15.
Harvest volumes rose 32% to 18,914 tonnes gutted weight. The Farming Scotland unit posted an EBIT of DKK 16 million, down 35%, with volumes falling 13% to 6,286 tonnes. Incident-based mortality costs in Scotland were DKK 8 million, compared with DKK 18 million a year earlier.
The Fishmeal, Oil and Feed segment reported a 63% drop in EBIT to DKK 65 million, as revenue fell 34% to DKK 487 million.
External fishmeal and oil sales declined sharply, while internal feed sales rose 15% to 30,942 tonnes.
Freshwater operations in the Faroe Islands reported EBIT of DKK 56 million, up from DKK 22 million, driven by a 52% increase in smolt transfers and a 3% rise in average weight to 421g.
In Scotland, EBIT improved to DKK 1 million from a loss of DKK 34 million, though smolt volumes dropped 63%. Average weight rose 40% to 169g.
Total (EPA:TTEF) group harvest rose 17% to 25,200 tonnes. Bakkafrost expects to harvest 97,000 tonnes in 2025, with 77,000 tonnes from the Faroe Islands and 20,000 tonnes from Scotland, front-loaded into the first half of the year under a de-risking strategy.
Operational EBIT margins declined to 24% from 40% in the Faroe Islands and to 4% from 5% in Scotland. Group operational EBITDA fell to DKK 694 million from DKK 879 million.
Cash flow from operations was DKK 590 million, down from DKK 676 million. Net investments rose to DKK 304 million, primarily in hatcheries and feed production.
Net interest-bearing debt declined to DKK 2.8 billion from DKK 3.0 billion at the end of 2024. The equity ratio stood at 62%.
The company plans to sign contracts covering 15-20% of its 2025 harvest, down from prior years. A dividend of DKK 8.44 per share, totaling DKK 501 million, was approved and will be paid around May 21.