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SalMar ASA reported strong financial performance in its Q3 2025 earnings call, with a notable increase in operational EBIT and harvest volumes. The company’s stock saw a 1.52% increase in Oslo trading, reflecting investor confidence in its strategic initiatives and future guidance. In the US market, SalMar trades at $0.76, with InvestingPro analysis indicating the stock is currently undervalued compared to its Fair Value. The stock has delivered an impressive 230.43% return over the past year despite recent volatility.
Key Takeaways
- Operational EBIT rose to NOK 711 million, marking a significant increase from the previous quarter.
- Harvest volume surged by 45% to 93,200 tons, a record high for the company.
- SalMar’s stock price increased by 1.52%, closing at NOK 609.6.
- The company is investing in innovative technologies, including sea-lice lasers and offshore farming.
- Guidance for 2026 anticipates a 7% growth in total harvest volume.
Company Performance
SalMar demonstrated robust performance in Q3 2025, driven by increased operational efficiency and strategic investments in technology and production. The company achieved a record harvest volume, supported by strong biological performance in Northern Norway. This growth positions SalMar well against competitors in the global salmon market, which has seen high supply levels in early 2025.
Financial Highlights
- Operational EBIT: NOK 711 million (up NOK 187 million from Q2 2025)
- Harvest Volume: 93,200 tons (45% increase from previous quarter)
- Profit for the Period: NOK 332 million
- Adjusted Earnings Per Share: NOK 1.3
Outlook & Guidance
Looking ahead, SalMar projects a total harvest volume of 319,000 tons for 2026, translating to a 7% growth. The company expects organic volume potential to reach 378,000 tons. Volume increases are anticipated across various regions, including Norway & Ocean (+6,000 tons), Iceland (+8,000 tons), and Scottish Sea Farms (+11,500 tons). Despite expectations of lower global volume growth in 2026, SalMar remains optimistic about its market position.
Executive Commentary
CEO Frode Arntsen emphasized SalMar’s commitment to sustainable practices, stating, "We produce salmon on the salmon’s terms." CFO Ulrik Steinvik highlighted the company’s focus on cost efficiency, noting, "Our focus is on the things we can influence," and expressing the aim to be "the most cost-effective fish farmer."
Risks and Challenges
- Potential supply chain disruptions could impact production schedules.
- Market saturation in key regions may affect pricing power.
- Regulatory changes in offshore farming could pose operational challenges.
- Economic fluctuations might influence global salmon demand.
- Biological risks, such as disease outbreaks, remain a concern for operations.
SalMar’s strategic initiatives and solid Q3 performance reflect its resilience and adaptability in a dynamic market environment. The company’s efforts in innovation and efficiency are poised to support its growth trajectory in the coming years. With a beta of -0.66, SalMar could offer portfolio diversification benefits. InvestingPro analysis suggests the stock is trading below its Fair Value, potentially offering an opportunity for value investors interested in the aquaculture sector. Explore SalMar and other undervalued opportunities with InvestingPro’s Most Undervalued list.
Full transcript - SalMar ASA (SALM) Q3 2025:
Frode Arntsen, CEO, SalMar: Welcome to the presentation of SalMar’s results for the third quarter of 2025. My name is Frode Arntsen, and I am the CEO. Joining me today is our CFO, Ulrik Steinvik. I have said before that SalMar is a job 24 hours a day, 360 days a year. When we say we produce salmon on the salmon’s terms, this has really been as true as now in the third quarter. The record high harvest volume and activity level we’ve had this quarter have meant that employees across the entire value chain have been working day and night to ensure we carry out the necessary lice treatments, the farming sites are ready when the whale boat arrives, that the processing plants are ready when the fish is to be harvested, and that we are able to sell and ship our products to all corners of the world.
I want to say a big thank you to all our employees who have worked day and night through the quarter. You are the team that makes it possible for us to present financial results today that we are more satisfied with than the last quarter, even though salmon prices have been lower. At the same time, you are also laying the foundation for us to increase volumes further into 2026 and reduce cost levels going forward. Today’s review will follow the same sequence as before. I will take you through some highlights as well as the segments. Then CFO Ulrik will guide you through the financial update. Finally, I will focus on volume for 2026 and new units for post-smolt production at sea. In total for Norway, we harvested a record high 89,400 tons at a margin of NOK 9.6 per kilo and operational EBIT of NOK 858 million.
Including Icelandic salmon and SalMar Ocean, we harvested 93,200 tons in the quarter, with a result of NOK 711 million at a margin of NOK 7.6 per kilo. The price level during the period affected profitability, but we saw a significant improvement in the price achieved throughout the quarter. The share of superior quality is back to normal levels at its mid-90%. Northern Norway has continued to show strong biological performance and corresponding positive cost development. Sales and industry delivered yet another strong result, driven by positive contributions from contracts and flexibility in the setup to handle the record high volume. Weak results from Iceland due to continued high cost, and continued good biological performance in Scotland. As you know, the merger with Vilskoi was completed in August, which affects several of our financial key figures, something Ulrik will return to.
The volume guidance for 2025 remains unchanged overall for Norway and Iceland, but we increase slightly in Scotland. Going into 2026, we expect a harvest volume of 319,000 tons and an increase of 20,000 tons, or 7%. Now the operational update. In Central Norway, we harvested 47,000 tons in the quarter with an operational EBIT of NOK 121 million, giving an EBIT per kilo of NOK 2.6. As expected, it was a weak result in the third quarter. Low salmon prices, combined with the cost level of the fish we harvested, resulted in a negative outcome for the period. The Spring 2024 generation was the one we harvested the most during this period. As you know, this has been a challenging generation for us with weak biological performance, which has led to a higher cost level.
At the same time, there has been strong lice pressure in Central Norway, which has continued into the fourth quarter. This has made it necessary to remove some smaller fish for welfare reasons and has influenced which sites we harvested from. This affected the results in Q3 and will also have some impact in Q4. In Q4, the Autumn 2024 generation will make up the bulk of the volume we plan to harvest. Compared to Spring 2024, this generation has had better biological performance, and therefore we expect a somewhat lower cost level. The underlying biological status of the fish in the sea is good, but lice pressure has been high, which has affected growth. Therefore, we will reduce the volume for 2025 to optimize biology and MIB utilization towards 2026. Volume will be reduced by 13,000 tons to 143,000 tons.
In Northern Norway, we harvested 42,500 tons in the quarter with an operational EBIT of NOK 468 million and EBIT per kilo of NOK 11. The very strong biological performance at sea continued in the third quarter with high growth and improved survival. It is not just individual sites that stand out, but many sites across both generations we harvested from that have performed very well. We completed harvesting of the Autumn 2023 generation early in the quarter, and it has mainly been the Spring 2024 generation we have harvested from. The positive cost trend continues even though the Q3 result was impacted by the destruction of one site due to ISA, which accounts for NOK 1.8 per kilo in the quarter. Looking ahead, we will continue harvesting from the Spring 2024 generation and expect a somewhat lower cost level in Q4 here as well.
As a result of the strong growth and biological performance, we are increasing the volume guidance for 2025 by 13,000 tons to 119,000 tons. Going to SalMar Ocean, where there has been less activity in the third quarter, operational EBITDA for the period was minus NOK 8 million. New smolt was stocked in Ocean Farm One in August, approximately 1 million fish with an average weight of 700 grams. We plan to harvest this in the second quarter of 2026. So far, production has gone well with low mortality and good growth. To date, we have not needed any lice treatments for this generation, despite the high lice pressure in Central Norway. In addition, we can mention that we have submitted the conversion application for the development licenses for Arctic offshore farming. The sales and industry segment delivered an operational EBIT of NOK 534 million.
As expected, it was a strong result for the segment, driven by continued positive contributions from contracts given the market prices experienced. The contract share was 22% in the period. In addition, we have truly demonstrated the strength of our setup by handling the record high harvest volumes during the quarter. As of today, we have already harvested over 100,000 tons at Innova Nord in Northern Norway this year, including volumes processed from external parties. Day after day, week after week, our processing plants have been open and handle fish of all sizes and qualities. Even when railways and roads were closed, our logistics team ensured the fish reached dining tables around the world. The price development we have seen during the quarter, with week after week of record export volumes out of Norway combined with rising price levels, shows that demand for our products is very strong.
Something we also experience daily in dialogue with customers worldwide. In the fourth quarter, we expect somewhat lower volumes through our facilities due to slightly lower volumes from the farming segments compared to the third quarter. The contract share is expected to be around 27%. Moving to the Westfjords in Iceland, where they harvested 3,800 tons in the quarter with an operational EBIT of NOK -110 million and EBIT per kilo of NOK -29.2. As expected, it was a weak result in the third quarter, driven by low salmon prices, but particularly due to the cost level of the 2023 generation that we have harvested during the period. One-off costs of EUR 3.2 million, or around NOK 10 per kilo, also impacted the figures in the quarter. These are related to a write-down of biomass value at one site and are not something we expect going forward.
Looking ahead, we expect the cost level to decrease. We harvested the last part of the 2023 generation at the start of Q4, and we expect costs to be lower when we start harvesting from the 2024 generation. Volume guidance for 2025 remains unchanged. Moving to our joint venture in Scotland, Scottish Sea Farms, who in the quarter harvested 7,200 tons with an operational EBIT of NOK 8 million and EBIT per kilo of NOK 1.2. As expected, harvest volumes were lower in the third quarter, and biological performance has continued to be good in the regions where operations take place. The biological status at sea is good, and as a result, the volume guidance for 2025 is increased by 1,500 tons to 33,500 tons.
With this, I have reached the end of the operational update, and I would now like to hand over to Ulrik, who will take you through the financials. Thank you, Frode, and good morning to all of you. The financial results for the group we are presenting for the third quarter are affected by the low salmon prices during the quarter, caused by the high global supply growth we experienced in the first eight months of the year. However, the biomass status in the industry indicates expectations of a somewhat different development going forward. For our part, the figure shows that our relative price achievement is better than earlier this year, as a result of the superior share returning to nearly normal levels again in the group.
This, all else equal, contributes positively in terms of biological performance and biological status, which we also see reflected in the development of underlying growth costs and cost of standing biomass. As I mentioned earlier, we cannot control market prices, and our continuous focus is on biology, cost, and efficient operations, enabled by discipline and a strong corporate culture. In that regard, I will provide you with an update on the cost development in the group at the end of my section today. Further, the merger with Vilskoi was completed in August, impacting both profit and loss statement and balance sheet items, which I will comment on along the way. Now it is time to look at the figures, and I will start by giving some comments related to the profit and loss statement.
At the top right, you see that operational EBIT increased by NOK 187 million compared to the second quarter, from NOK 524 million to NOK 711 million. The increase is driven by the record high volume we harvested during the period. Compared to the previous quarter, the volume rose by 28,800 tons, or 45%. Furthermore, you see that the reduced price achievement puts the result down by NOK 505 million. It is worth noting here that the reduction in the sea salmon spot price during the period was NOK 10 per kilo, while SalMar’s price achievement fell by about NOK 5 per kilo. The reason for the smaller price drop for us in SalMar is the increased share of superior quality, which returned to nearly normal levels in the group in the third quarter compared to what we experienced in the second quarter.
On the other hand, the price achievement is negatively affected by the lower share of contracts, which fell from 37% in the second quarter to 22% in the third quarter. Overall, the price achievement for the quarter is above the reference price. Costs are, as expected, at the same level as the previous quarter. However, note that we had a one-off cost in the quarter due to culling of biomass on a site in Northern Norway because of ISA. This amounted to NOK 76 million in the third quarter. Iceland and Ocean contributed a positive change from the previous quarter of NOK 25 million, despite an extraordinary cost in Iceland of EUR 37 million in the quarter. Reduced overhead costs within the Ocean segment contributed positively to the change.
Moving to the profit and loss statement, we see that the production tax in Norway and resource tax in Iceland amounted to NOK 98 million in the quarter, an increase of NOK 24 million driven by volume. Non-recurring items reduced the result by NOK 14 million in the quarter and consist of costs related to litigation. As a result of a higher number of fish, which also led to increased biomass, lower cost on the biomass, and higher forward prices, net fair value adjustments are positive. The fair value adjustment increased the net result by NOK 354 million. Share of net profit from associated companies was negative at NOK 19 million. A positive operating result turned into a net negative share after tax. After that, negative fair value adjustments of biomass have been taken into account.
Net financial cost amounts to NOK 151 million, which is NOK 200 million lower than the previous quarter. This follows the merger with Vilskoi, where an accounting gain of NOK 190 million arose upon disposal of an associated company in connection with the stepwise acquisition. Where Vilskoi was consolidated from August. As well as a gain from the sale of another associated company of NOK 30 million. Interest costs are therefore somewhat higher, driven by the increased debt level. In total, this gives a result before tax of NOK 783 million. Ordinary corporate tax, together with recognized resource rent tax cost, amounts to NOK 451 million in total. The profit for the period is therefore NOK 332 million, and this gives an adjusted earnings per share of NOK 1.3 per share for the quarter.
Moving on to the balance sheet, we see that total assets have increased by NOK 2,115 million from the previous quarter to NOK 57.8 billion. The merger with Vilskoi increased total assets by NOK 1.9 billion. In addition, the value of biomass has increased. Here, it is worth noting that the fair value adjustment is the driver behind the increased booked value of the biomass and not the cost of the fish. In Norway, the cost of biomass is lower, both in NOK per kilo and in absolute terms, despite having higher biomass in the sea compared to both the previous quarter and the same quarter last year. This provides a basis for a reduced cost out of stock in the coming quarters. The equity ratio has increased to 33.2% as a result of the positive net profit and issuance of consideration shares in connection with the merger with Vilskoi.
Net interest-bearing debt has increased by NOK 1.5 billion to NOK 21.6 billion, driven by the dividend paid early in July. The key debt ratio, NIB divided by EBITDA, has increased to 3.9. The underlying driver of the temporary increase in the ratio is lower salmon prices in 2025 and profitable investments in biomass and new technology that will provide further volume growth going forward. With increased earnings and strict discipline on spending, we expect that debt and debt ratio to decline going forward. As mentioned before, our strategy is to be optimally and robustly financed at all times and to stay ahead of maturities. We therefore issued two new green bonds in August, totaling NOK 2 billion. At the same time, we extended and increased the commercial papers to NOK 1.5 billion and increased the overdraft facility by NOK 400 million.
At the end of the third quarter 2025, we had NOK 9.3 billion in available liquidity in the group, also taking into account the facilities held by partly owned subsidiaries. As you can see from the graph on the right, we have flexible financing diversified between the bank and bonds with long maturities and facilities that ensure sufficient liquidity at all times. Let’s look at the change in net interest-bearing debt, including leasing, during the quarter. We started with NIB, including leasing, at NOK 21,715 million. The merger with Vilskoi increased NIB by NOK 143 million, giving us a starting point for the quarter of NOK 21,859 million. During the period, we had a positive cash flow from operations, where EBITDA was NOK 1.2 billion. We paid taxes of NOK 9 million from some smaller partly owned companies.
It is worth noting here that we do not expect significant tax payments later in 2025. Change in working capital amounted to NOK -1,400 million, driven by lower biomass cost and an increase in accounts payable. Total investments amounted to NOK 488 million in the quarter. NOK 43 million relates to the sale of minor assets in the group and dividends received from associated companies. Investments in fixed assets total NOK 531 million and are mainly related to our farming activities at sea. As mentioned earlier, this is driven by the establishment of submerged operations at several Autumn 2025 sites and investment in sea-lice laser technology.
At the end of the third quarter, more than 40% of our sites now use preventive technology, and through that, we later provide an update on new investments in 2026 that will reinforce previous direction and support the right technology at each site. CapEx discipline in SalMar is strong, and in 2026, we expect a lower CapEx level than we have in 2025. The larger change in NIB during the period is the dividend paid early in July of NOK 2.9 billion. Taking into account interest payments and changes in leasing, we end up at NOK 23,266 million in NIB, including leasing, at the end of the third quarter of 2025. Cost focus and profitable growth are two of our fundamental pillars in creating shareholder values.
This includes, among other things, realizing synergies, reducing costs, making efficient use of variable input factors, as well as reducing the fixed cost space in the value chain. Effective integration and synergy realization are crucial for profitable growth through acquisitions. We have previously reported the realization of NOK 844 million in annual recurring savings following the acquisition of NRS and NTS. The impact on cost out of stock will take some time. In the top right corner, you can see the cost per kilo of difference between the old SalMar sites and the NRS sites. Up to the 2023 generation. It is evident that the cost gap has significantly narrowed since the takeover at the end of 2022. As you know, harvests from the 2024 generation, the cost differences are virtually gone. This synergy realization has been made possible through a clear plan, execution capability, and focus on cost drivers.
Regarding cost reduction and efficient use of variable input factors, the graph in the middle right shows that the on-growth cost per kilo in Norway so far in 2025 is lower than at the same time last year. The driver behind this is lower input cost and better biological performance, especially in Northern Norway. This effect has become evident in cost out of stock throughout the year in Northern Norway, as well as in the biomass cost in Norway at the end of the third quarter. The costs are lower both per kilo and in absolute terms, despite the higher biomass. This underpins our expectation of cost reductions in the coming periods. As mentioned at this time last year, we have initiated a new improvement program with a structured approach across the entire value chain to reduce the fixed cost base.
This work identified annual cost savings of NOK 1.2 billion. An over target of NOK 1.2 billion remains unchanged. However, the measures must be implemented in a way that does not compromise production. We cannot cut corners or save ourselves into trouble, so the focus on the biology is non-negotiable. The implementation of these measures will therefore not follow a straight line, as we need to run some double costs to ensure we achieve the desired results. As a result, the realization of the identified measures on the fixed cost base will be pushed further out toward 2029. It is important to emphasize that regardless of this, further cost reduction and value creation will occur through.
Cost and efficiency measures in operations, economies of scale from both organic and strategic growth, better price achievement through optimized fish allocation, changes in raw material usage and impact on raw material prices, and biological effects from investments and initiatives throughout the value chain, from genetics to feed and seed production. As is well known and mentioned earlier today, both salmon prices and the raw material prices will fluctuate over time. Our focus, as I have tried to highlight here, is on the things we can influence. We aim to be the most cost-effective fish farmer, delivering the highest total return to shareholders. With that, I conclude the financial review and hand the floor back to Frode. Takk, Ulrik. Now going into the volume guidance for 2026. As mentioned earlier, we expect increased volume in 2026.
Norway and Ocean will increase by 6,000 tons to 275,000 tons, with the increase planned to come from Central Norway. Northern Norway has, as you know, performed very strongly in 2025, and we will use 2026 to further optimize production plans for future growth in both Northern and Central Norway. After some challenging years in Iceland, the outlook for the fish we plan to harvest in 2026 looks better. Therefore, we expect an increase of 8,000 tons to 21,000 tons in 2026. Scottish Sea Farms has had a somewhat lower harvest volume in 2025 to optimize stocking profiles and site utilization. In 2026, we expect a significant increase of 11,500 tons up to 45,000 tons. In total, we are increasing the guidance by 20,000 tons and expect 319,000 tons in 2026. A growth of 7%.
As communicated earlier, we have additional organic volume potential that we will realize in the coming years. The potential is 378,000 tons, or 19% higher than what we planned for next year in 2026. It will take some time to achieve this. We need to optimize stocking profiles and site utilization to achieve the biological performance and license utilization we aim for. Therefore, we are now taking steps to improve this going forward in Norway. At SalMar, we have always been at the forefront of adopting different production methods, and we are perhaps the only player that has all forms of sea-based production in operation, supported by a dedicated project department working to develop tomorrow’s operational solutions. Many of you have probably noticed the upcoming aquaculture white paper to be reviewed in Parliament and the environmental flexibility scheme introduced recently.
We at SalMar are positive about having a constructive dialogue on the aquaculture white paper and are supportive of the environmental flexibility scheme. However, some important factors must be in place for the scheme to work as intended and not only in red zones. It should be extended to include green and yellow production areas. It is crucial that the scheme remains technology neutral, as we have learned that the right technology for the right site is essential. Most importantly, predictability in regulation is key. We operate a long and complex value chain, and predictability is necessary. As you know, we currently have two closed units in operation in production area 5, and together with partners, we have now developed a new closed unit that we plan to use for post-smolt production in Central Norway.
Three units are now under construction and will be operational at the start of 2027. This is a part of the solution to make even better use of our best sites, reduce lice exposure during critical periods of the year, and contribute to improved biological performance in terms of survival and growth. We are doing this because we want to become even better, strengthening our focus on using the right technology to achieve optimal production on the salmon’s turfs. We are now approaching the end of today’s presentation. I have presented the guidance going forward, and you can see it summarized on the slides. After strong global volume growth in 2025, we expect significantly lower global volume growth in 2026. Although global uncertainty related to tariffs and increased and varying tariff rates is generally bad news for world trade, the Norwegian aquaculture industry has had tough times before.
We have a positive outlook for the road ahead. We continue to gain more customers who eat salmon, and together with increased volumes and reduced cost levels, this gives us a positive view of the future developments. With that, we have reached the end of the presentation. Our next presentation will be in February. Before then, I expect everyone will have some salmon on the Christmas menu this year. Thank you for your attention.
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