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SalMar ASA reported its second-quarter earnings for 2025, revealing a notable decline in operational EBIT to NOK 524 million from NOK 798 million in the previous quarter. The stock has shown remarkable momentum, with a 265% return over the past year according to InvestingPro data. Currently trading at $0.88, analysis suggests the stock may be undervalued based on InvestingPro’s Fair Value model. Key financial and operational updates were shared, including a successful merger with Vilskoy and the issuance of two green bonds.
Key Takeaways
- Operational EBIT decreased significantly from the previous quarter.
- Merger with Vilskoy completed, potentially increasing future volume.
- Issued NOK 2 billion in green bonds, supporting sustainability efforts.
- Harvested volume guidance for 2025 increased by 18%.
- Stock price increased by 1.52% post-earnings announcement.
Company Performance
SalMar’s performance in Q2 2025 was marked by a decrease in operational EBIT to NOK 524 million, down from NOK 798 million in Q1. The company harvested 64,500 tonnes of salmon, with a margin of NOK 8.1 per kilo. InvestingPro data shows the company maintains a Fair overall financial health score, with particularly strong relative value metrics. Revenue reached $224.19 million in the last twelve months, though profitability remains challenged with a gross margin of 6.34%.
Financial Highlights
- Operational EBIT: NOK 524 million (down from NOK 798 million in Q1)
- Total harvested volume: 64,500 tonnes
- Profit after tax: NOK 146 million
- Adjusted earnings per share: NOK 1.9
- Equity ratio: 32.8%
- Net interest-bearing debt: NOK 21.7 billion
Outlook & Guidance
SalMar remains optimistic about the future, with expectations of cost level decreases and increased volume in the latter half of 2025. The company projects organic volume growth in the coming years, supported by the Vilskoy merger, which could boost future volumes to 378,000 tonnes. Analysts maintain a Strong Buy consensus on the stock, according to InvestingPro, with the next earnings report expected on November 12, 2025. For deeper insights into SalMar’s potential, check out the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, offering expert analysis and actionable intelligence for smarter investing decisions.
Executive Commentary
CEO Frode Dansen emphasized the company’s commitment to finding optimal solutions across the value chain, despite short-term challenges like lower salmon prices. CFO Ulrik Stenwik highlighted the focus on biology, cost management, and efficient operations as key priorities for sustaining growth.
Risks and Challenges
- Fluctuating salmon prices may impact profitability.
- Tariffs and market fluctuations present ongoing challenges.
- Managing biological performance and cost efficiency remains critical.
- Global salmon supply growth is expected to slow, affecting market dynamics.
- Macroeconomic pressures could influence demand and pricing.
SalMar’s Q2 2025 earnings call provided insights into the company’s strategic initiatives and challenges ahead. Despite a dip in EBIT, the company is poised for growth, bolstered by strategic mergers and sustainability efforts.
Full transcript - SalMar ASA (SALM) Q2 2025:
Frode Dansen, CEO, Salmar: My name is Frodo Dansen, and I am the CEO of Solmoid. And together with me today, I have our CFO, Ulrik Stenwik. At Salmoyd, it is a job twenty four hours a day and every day of the year when we say that we will produce salmon on the salmon terms. It governs everything we do and all the steps we take because, as we said last quarter, when you are not quite where you want to be, you roll up your sleeves and work extra hard regardless of the weather, day or what time it shows. It is to solve all tasks many times, try to make the impossible possible and reverse the trend and result to once again be a leading farmer of Atlantic salmon.
I know that all Salmide employees are also very motivated for this, and thank you all for their job well done in the period. The financial results we are presenting for Q2 today was as expected, a result we are not satisfied with, driven by a high proportion of downgraded fish. But underlying, we are experiencing several good signals in Q2 and so far in Q3, which will give better results in the quarters ahead. We have a record high number of fish and biomass in the sea at the end of the second quarter, which will give increased volume in the second half of the year. The Superior share is back to normal levels from the third quarter.
And at the same time, we also see that the cost level is decreasing, which will become apparent later in the second half of the year. At the same time, we know that we have a robust corporate culture and a strong setup in the value chain, which means that we can produce the best salmon for our customers all over the world in an optimal and cost effective way with a steady good demand. I will come back to all this later today. The update itself will follow the same order as before. I will take you through some highlights as well as the segments before CFO, Ulrik, will take you through the financial update.
At the end of the presentation, I would like to focus on the status of our Biologic and the continued strong demand for our product. In total, we harvested 54,500 tonnes for Norway at the margin of NOK12.8 per kilo and delivered an operational EBIT of NOK $696,000,000. Including Icelandic salmon and Salmide Ocean, we harvested 64,500 tonnes in the quarter with the result of NOK524 million at a margin of NOK8.1 per kilo. Northern Norway has had very good biological performance and associated positive cost development. Central Norway is characterized by weak price achievement as a result of a high proportion of downgraded fish.
We completed harvesting from both locations in Salmoyd Ocean. Sales and industry with a very strong result, driven by a positive contribution from the contracts and the capabilities in our setup. Weak results from Iceland as a result of continued high cost and low salmon prices. And the low salmon prices also give a negative result from Scottish Sea Farms. In addition, we have taken steps to strengthen our value chain and financial position.
The merger with Vilskoy was completed this August, and we issued two new green bonds of NOK 2,000,000,000 last week. We are increasing our volume guidance for 2025 by 4,000 tonnes to 298,000 tonnes as a result of particularly good growth in Northern Norway and the inclusion of the volume from Vilskoye going forward. To give you a little more detail, I would like to go through the operational updates. In Central Norway, we harvested 33,900 tonnes in the quarter with an operational EBIT of NOK 7,000,000, which gives EBIT per kilo of 0.2. As expected, a weak result that is solely driven by a high proportion of downgraded fish during the period, which affects our price achievement, although we saw an improvement towards the end of the period in the Superior share.
We finished harvesting from the autumn twenty three generation in the period, and we continued harvest from the spring twenty four generation. Looking ahead, it is the spring twenty four generation that we will harvest the most of now in the third quarter before we start harvest towards the end from the autumn twenty four generation. The Superior share has increased significantly from July by around 35 percentage points in Central Norway compared to the second quarter, which means that we are back at normal levels going forward. The biological status of the fish in the sea is underlying good. As expected, Central Norway are now in the period with the highest lice pressure.
So far, we have handled the lice pressure in a good way, also helped by several locations with preventive technology in use. But going forward, this will, as usual, be our biggest element of uncertainty when it comes to lice levels, fish welfare and which locations we will prioritize to harvest from. We expect a similar cost in the third quarter. We need to get more volume on new generations before we see clearer effects of lower cost levels. We expect the volume in the third quarter to be significantly higher compared to the same period last year.
In Northern Norway, we harvested 20,600 tonnes in the quarter with an operational EBIT of NOK288 million and EBIT per kilo of NOK14. Dollars The very good biological performance in the sea has also continued in the second quarter with high growth and increased survival rates, especially if we compare with the same quarter last year, but also measured against previous years. It is mainly the autumn twenty three generation that we have harvested from in the quarter. And as Ulrik gave a small indication to in the previous quarter, we have had some locations that have performed very well with cost in books in the low 40s per kilo. This means that we have a positive cost development measured against the previous quarter.
And even though 80% of the volume was harvested in May and June, the period with the lowest price, the segment delivered a good result for the period. We have also downgraded fish in the North, but at a lower level than we have had experienced in Central Norway. And as in Central Norway, we have experienced a clear improvement in the superior share from Julie onwards. Looking ahead, we will harvest the last of the autumn ’twenty three generation and spring ’twenty four will make up the main volume in the third quarter. The biological status of fish in the North is good.
We expect the cost level to be at the same level in the third quarter compared to what we have now in the second quarter. The volume in the third quarter is also expected to be significantly higher compared to last year. Salmide Ocean, where harvesting from both units was completed early in the second quarter, 6,000 tonnes were harvest with an operational EBIT of 35,000,000 and EBITDA per kilo of 5.8. There was a low average weight on Arctic offshore farming, which affects the price achievement. Once again, Ocean Farm one shows good results on its production cycle with good growth and survival rates.
Smolt were released in Ocean Farm one this August, approximately 1,000,000 fish with an average weight of 700 grams from which we plan to harvest into the 2026. As you know, Arctic offshore farming will be replaced its net and the earliest smelter release in this unit will be in 2026. The Sales and Industry segment delivers on operational EBIT As expected, there was a strong result from the segment as a result of a higher positive contribution from the contracts given the market price experienced in the second quarter. The contract share was 37%.
Increased volume from the farming segments has also resulted in better capacity utilization of over harvesting facilities compared to what we had in the first quarter. And capacity utilization will increase further now in the second half of the year. But it is also a strong performance as a result of the setup we have with the high local harvesting and VIP capacity close to where we farm our salmon. The flexible setup in sales and industry means that we can effectively handle variations in both quantity, size and quality of what biological brings. And the VIP means that we can handle much of the downgraded fish ourselves.
But even though we have a high utilization of our VIP lines during the period, we were also forced to sell downgraded fish on to other processors during the period, which affect our price achievement. In the third quarter, we expect higher volumes through our facilities as a result of increased volume from the farming segments. The contract share will therefore be lower in the second half of the year. And in the third quarter, we expect around 22%. Although the good biologic in Norway has meant that volumes to the market have been higher than in previous years and thus pushing prices down, and we are experiencing some uncertainty related to tariffs.
We still see the demand for our products is very good. I will come back to this some later. Moving over to the Westfjords in Iceland, where 4,000 tonnes were harvested in the quarter with an operational EBIT of minus million and EBIT per kilo of minus 24.6 Towards the end of the period, the harvest volume was increased to minimize the effects of biological challenges as a result of BKD. This increase came at the end of the period when market prices were at their lowest affecting the result. And as expected, the cost levels level was still high.
Looking ahead, it will still be a high cost level in the third quarter. We will harvest the last part of the 23 generation now at the September, October. And unfortunately, we do not expect a decrease in cost level until we enter the fourth quarter when we harvest from the 24 generation. We expect the volume in the third quarter to be significantly higher compared to the corresponding quarter last year. We move to our joint venture in Scotland, Scottish Sea Farms.
In the quarter, we harvested 11,600 tonnes with an operational EBIT of minus 28,000,000 and EBIT per kilo of minus NOK 2,400,000.0. Although the trend of good results on harvested fish continues in the second quarter as well with a very good average weight of the fish over six kilos, which has given good results in terms of reduction in cost levels. Market prices during the period resulted in a negative result for the period. The company reports continued good biological status in the sea, where the next generation of fish to be harvested are doing well in all regions. With this, I have come to the end of the operational update, and I now want to give the floor to Ulrik, who will take you through the financials.
Ulrik Stenwik, CFO, Salmar: Thank you, Frode, and good morning to all of you. Salmar, like the industry in general, have experienced and are experiencing lower spot salmon prices now in a period where the high supply growth in the first half of the year is going through the value chain in the various markets, including the new markets. And as pointed out in the first quarter presentation, we also had a high proportion of dungare fish in the second quarter. And this proportion was, moreover, significantly higher than average in Norway. Market prices and price achievement negatively affects our margin.
We cannot control market prices, and our continuous focus is, therefore, on biology, cost, efficient operations and last but not least, a strong corporate culture that hands ongoing challenges and further develops the business. In this context, it is good to see a significant reduction in ungrowth costs so far this year compared with the same period last year. And this has also begun to be reflected in the cost released from stock. Here, we can mention the positive cost development we have in Northern Norway the last quarters. Furthermore, our previously stated cost reduction target of 1,200,000,000.0 in the group remains in place, which we will return to in more detail at the next quarterly presentation.
At the same time, we have continued to build biomass and recently completed acquisitions that facilitate further growth, not only in the second half of the year, but also in the years ahead. This gives us a good starting point for the way forward. The financial update will, as usual, focus on changes in the quarter compared to the previous quarter. And towards the end, I will comment on the merger that has been completed with Vilskoy. Then it’s time to look at the numbers, and I will start by giving some comments related to profit and loss statement.
At the top right, we see that operational EBIT fell by million compared to the first quarter from NOK798 million to NOK524 million. We see that the reduction is driven by lower price achievement. Price achievement in Norway compared to the previous quarter is approximately NOK10 per kilo, lower than in the first quarter. Sea Salmon Index fell in the period by NOK18 per kilo, but due to an increased positive contribution from contracts, good utilization of raw materials in the period and a more even harvest profile throughout the quarter compared to the first quarter. The reduction was lower despite a higher share of downgraded fish in the second quarter compared to the also high share in the first quarter.
And this shows some of the strengths of the Salmar setup. As expected, costs are at the same level. Iceland and Ocean contributed with a negative change from the previous quarter of 118,000,000, which is explained by the lower salmon prices. It is also worth noting that the cost for Ocean and thus the result in the second quarter includes depreciation from the entire production cycle for our offshore units. Depreciation as part of cost released from stock alone amounts to 110,000,000 now in the second quarter and helps to explain the result from Ocean.
If we move to the profit and loss statement, we see that production tax in Norway and resource tax in Iceland amount to NOK 74,000,000, an increase of NOK30 million driven by volumes and increased share of volume from Iceland. Nonrecurring items reduced profit by NOK11 million in the quarter and consist of litigation costs and costs related to organizational changes in Iceland. As a result of higher numbers of fish in sea and increased biomass, net fair value adjustments of biomass are positive. The change in fair value increases profit with NOK 75,000,000. Profit from associated companies was positive with NOK 26,000,000 in the second quarter twenty twenty five, and positive fair value adjustments of biomass also affect the results of associated companies.
Net financial expenses amounted to NOK351 million, an increase of 25,000,000 from the first quarter. In total, this gives a profit before tax of NOK 190,000,000. Ordinary corporate tax, together with the resource rent tax, amounts to a total of 43,000,000. And profit after tax is costing at NOK 146,000,000. This gives an adjusted earnings per share of NOK 1.9 per share for the second quarter twenty twenty five.
And now to the balance sheet, where we see that total capital has increased by million from the previous quarter to NOK 55,700,000,000.0. The underlying driver is investments in preventive technology at sea and investment in biomass. The increase in biomass is something that Frode will comment on in more detail later today. Towards the end of the quarter, a dividend of NOK $0.02 2 per share was approved. The equity ratio has consequently been reduced to 32.8% because of this.
Cash effect will come in the third quarter. Net interest bearing debt, including leasing, has been reduced by million to NOK21.7 billion. And key figures for the debt ratio nibbed, including leasing on EBITDA, have been increased to 3.8. Without leasing, the net debt ratio is 3.6. The underlying driver of the temporary increase in the key figure is due to lower summer prices in the first half of the year and profitable investment in biomass that will result in a significant increase in volume in the coming periods.
Our strategy is to be optimally and robustly financed at all times as well as to be ahead of maturities. We, therefore, issued two new green bonds in August, totaling billion. This increases our flexibility, but also clearly demonstrating our desire for further sustainable development of the industry. As you can see from the graphs to the right, we have a flexible financing that is diversified between bank and bond, where there is a long time to maturity and the limits that ensure sufficient liquidity at all times. At the end of the second quarter twenty twenty five, we had billion available liquidity in the group, also taking into account the facilities of the partially owned subsidiaries.
If you take into account the dividend of NOK 2,900,000,000.0 that was paid early July and the bonds that were issued this August, we have billion in available liquidity. If you look at the change in net interest bearing debt, including leasing in the quarter, there are minor changes in this quarter. We started with a net including leasing of 21,976 million. And during the period, EBITDA was NOK 1,000,000,000. We paid taxes of NOK 45,000,000, and change in working capital amounted to minus NOK $457,000,000.
Total investments amounted to NOK $560,000,000 in the quarter. NOK11 million is related to the sale of smaller assets in the group as well as dividends received from associated companies. Investments in property, plant and equipment totaled million and are mainly related to the activity at sea. Farming had a somewhat higher level of investment in the second quarter, driven by the establishment of submerged operations at several autumn twenty five sites and investments in CLI lasers to increase the proportion of our sites that have preventive technology in use. We are already seeing a good effect from this, but we also expect an even better effect when the proportion of sites with preventive technology increases.
In total, these investments alone amount to million now in the second quarter. And the right technology at each site is crucial and guides decision making for future investments. Taking into account payment of interest and changes on leasing, we end up at 21,715 million in Nibd, including leasing, at the end of the 2025. As mentioned earlier, we and Samar are always open to growth opportunities when the price, quality and location are right. And in April, we announced that the Board of Directors of Vilskoy and Samar had approved a merger plan for the companies.
Vilskoy has 5,008 and 44 tonnes MAB and also own 17.5% of the shares in Nord Seafield, which has 3,916 tonnes MAB, where Salmar already owns the remaining part of the shares. The agreed consideration for the transaction is billion on a 100% basis. We already own 37.5% of Vilskoy. And for this part, no remuneration will be given. Therefore, 20% of the cash in the consideration will amount to million and 80% of the share will amount to 1,600,000.0 shares in Samoy.
This transaction was completed in August after we received approval from the relevant authorities and the creditor, Delam, had expired. And consequently, 1,600,000.0 share new shares were issued in Sandvall, which will have a positive impact on the equity ratio. We have also agreed that Freeway As will take over all other activities in Milskord that do not involve the production of salmon. We are pleased with this solution as it ensures an optimal setup for further development of the business and the Senja region. We take care of the salmon, our core business, and all of the business is taken care of by Ferry.
This provides opportunities for further profitable growth in close proximity to existing farming areas, further development of existing activities as well as realization of synergies in acquired activities. And with this, I come to the end of the financial update, and we’d like to give the floor back to Frode.
Frode Dansen, CEO, Salmar: Thanks for the update, Ulrik. As we have mentioned, we have experienced a very good growth in the sea. And at the end of the second quarter, we have a record high biomass in the sea, both measured in number and in biomass. If you look at the graphs on the screen, there are 3% fewer salmon in the sea in Norway at the end of the second quarter compared to the same time last year. But we in Solomay have 11,800,000 more individuals in the sea, which means that the others have 24,900,000 fewer salmon in the sea.
If we look at the biomass, it has increased by 6% for Norway or 52,000 tonnes. At Solmoyer, we account for as much as 34,800 tonnes of this corresponding to an increase for us of 26% or twothree of the entire increase in Norway, which is significantly above what our relative share of the licenses in Norway would indicate. This clearly shows that Solmar is the driver for the increase of biomass in Norway, which gives us a good foundation for the growth we will have in the second half of the year, but also for the next few years to come. At the same time, the biological status of our fish is good at the moment. And I can mention that yesterday, we received the Fish Welfare Award at Akwa Nour in Trondheim, an award we are proud of because it pays tribute to the long term work we do every day to ensure that our production is on the salmon terms.
If we take a closer look at the on growth cost per kilo, we have used the 2025 compared to the same period last year. We see that it has fallen by 12%. This is due to both good growth, but also due to reduced cost of important input factors such as feed. This will not immediately translate into lower costs in our result in the third quarter. But when we start harvesting from new generations later this year, we expect the cost level to decrease further.
At the same time, the first half of the year was weak when it came to the Superior share. But as you can see in the graph to the right, it has already increased significantly in July. Overall, in Norway, it has increased by 28 percentage points, a significant improvement. And we are now back to normal levels. So far in August, we have a level of 94% SUP average all facilities.
And as you know, all our fish put into the sea from the summer of last year or the autumn twenty four generation onwards have been vaccinated with a new winter wound vaccine, which we expect to have better effects when we get to the coming winter. And we are increasing our volume guidance for 2025. In Norway, we are increasing by 6,000 tonnes to 262,000 tonnes, where the increase comes from Northern Norway, both as a result of good growth, but also as a result of the fact that we are taking in the volume from Vilskoye now from August. We have finished Ocean for this year, and the result was 200 tonnes higher than what we have guided. We are reducing Iceland by 2,000 tonnes as a result of the challenges I mentioned earlier, but I would like to add that we also have a very good increase in both the number of fish and biomass in Iceland, which leaves room for increased volume in 2026.
We keep Scottish Sea Farms unchanged. In total, we are increasing our guidance by 4,000 tons and now expect 298,000 tons in 2025, a growth of 18% compared with 2024. But we have additional organic volume potential that we will gradually take out in the years to come. With Vilskoyd coming in, we increased the potential to 378,000 tons, which is 79,000 tonnes or 27% higher than this year’s volume and is a growth that will come in the next few years. As you know, the start of 2025 has been characterized by lower spot prices than in previous years.
This is mainly driven by good biological in Norway, which means that the volume to the market has increased. At the same time, tariffs to The U. S. Have also contributed to increasing global uncertainty. Tariffs are never a good thing, but so far we experienced that the volume is absorbed as usual despite the tariff rate for our customers in The U.
S. I can also mention that we have recently signed a new annual contract to The U. S. With an important customer, where both volume has increased and price levels are attractive compared to what you can see on Euronext salmon futures. Because we experienced that our customers want more volume and are very interested in new contracts for 2026 at attractive price levels, not just in individual markets, but in markets all over the world.
As you can see from the pictures to the right of the screen, it’s salmon from Salmoy in all corners of the world. And I want to share some data points for demand with you. China has had a very good growth this year, and Norway now has a market share of 71% in the Chinese market, almost doubling from the market share Norway had four years ago in China. Volume growth from Norway to China so far in 2025 has been strong and above 100%, but we also expect this to be strong going forward as we have had a good dialogue with several major players in China. If you remember back, we also established a sales office in Thailand in 2023.
Now in 2025, the growth in this market has been very high with close to 50% in volume, which also shows that establishing ourselves closer to certain markets is important so that we establish new sales channels and new customers. If you look at the graph on the left of the screen, you can see that the price decline has made salmon more attractive compared to other proteins. This also strengthens the position of salmon in competition with other proteins. And in many markets, campaigns are now underway that are important to further increase the demand for our products. So even though it is demanding in the short term with lower salmon prices, it also has some positive sides.
We are building a market, which over time builds the demand for salmon further. And with our volume and our facilities, it means that we can produce products that the market has a great demand for. And the flexibility we have also means that we can adapt the product portfolio of salmon we offer in the market and thus ensure that we can deliver salmon to a wide range of customers in different customer groups and markets. This is a clear strategic strength for us at Sunlight. Then we move towards the end of today’s presentation.
I have gone through the guidance going forward, and you can see it summarized to the right on the slide. For 2025, we expect global supply growth to slow down in the second half of the year after high year on year growth measured against the previous year in the first half of the year. As mentioned, we at Solmoid have a record high seasonal number of both fish and biomass in the sea, which gives us a good foundation for the growth we expect from ourselves in 2025, but also for growth into 2026. The global uncertainty related to tariffs and increased different tariffs is generally bad news for world trade. The Norwegian aquaculture industry has been out on a winter night before.
And as mentioned, we work hard every single day throughout the value chain to find the best solution for us and our customers. At the same time, we assume that the Norwegian authorities will do their utmost together with the seafood industries organizations to remove or reduce trade barriers such as this. In addition, one must ensure stable, safe and predictable framework conditions here at home, something the Norwegian authorities can do something about on their own regardless of what happens in The United States. Because we have a positive view for the future, we are building the market and getting more new customers who eat salmon and together with better quality of harvest volume and the downward trend we see on the cost side, this gives us a positive view of the development going forward. With this, we have come to the end of the presentation.
Thank you very much for your attention. Our next presentation is in November. Before that, I hope that everyone will have a nice late summer and autumn. And as always, remember to eat lots of salmon wherever you are. Thank you very much.
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