Building biomass in the Faroes

Building biomass in the Faroes




(Figures in parenthesis refer to the same period last year unless otherwise specified)

The Bakkafrost Group delivered a total operating EBIT of DKK 353 million (DKK 587 million) in Q2 2023 and made a profit of DKK -123 million (DKK 845 million).

The combined FO farming and VAP segments made an operational EBIT of DKK 216 million (DKK 509 million). The FO farming segment made an operational EBIT of DKK 242 million (DKK 617 million). The SCT farming segment made an operational EBIT of DKK 71 million (DKK 41 million). The VAP segment made an operational EBIT of DKK -26 million (DKK -108 million). The EBITDA for the FOF segment was DKK 128 million (DKK 119 million).

Commenting on the result, CEO Regin Jacobsen said:

“Overall, we are satisfied with the results in this quarter. Especially with our Fishmeal, -Oil and Feed segment which delivered a record quarter. H1-2023 has been record-breaking with all time high sourcing leading to all time high fishmeal and -oil production. Fish meal and - oil prices are also all-time high.

Harvest volume from our Faroese salmon farms have been low in the quarter due to a back-end loaded harvest profile for 2023 and low mean weights.

For the first time past 12 years, we increased the biomass in the Faroe Islands during the cold period of the year. The biomass is healthy, and we expect an increasing average weight of harvested fish going forward.

The farming operation in Scotland performed well in the first five months of 2023, but towards the end of Q2, mortality levels increased due to environmental challenges. This development has continued into Q3 and can lead to lower harvest volumes in Scotland for 2023 than anticipated. We follow the situation closely and evaluate a range of risk-mitigating measures.

With the recent AP4 expansion of the Applecross hatchery in Scotland, the hatchery capacity in Scotland is increasing. In Q2 2023, we released the first batch of smolt weighing between 200-300g and a large batch of 200-300g smolt will be released later this year. This marks the beginning of the large-smolt transition instrumental for the transition of the farming operation in Scotland.

At our Capital Market Day in Scotland 6 June 2023, we presented our plans for 2024-2028, which includes investments of 6.3bn DKK leading to an annual harvest of 165,000 tonnes HOG in 2028 and an annual production capacity of 200,000 tonnes.   

The salmon market has been good in this quarter with high prices, although a more significant price difference between small and large-sized salmon towards the end of the quarter, and a tight supply outlook for H2.”


Total harvested volumes for Q2 2023 were 16,001 tonnes gutted weight (19,747 tgw)

  • FO: 8,658 tgw (13,101 tgw),
  • SCT: 7,343 tgw (6,646 tgw).


In total, 6.7 million (6.2 million) smolts were transferred during Q2 2023

  • FO: 3.6 million (3.3 million),
  • SCT: 3.1 million (2.8 million).


The combined FO farming and VAP segments made an operational EBIT per kg in Q2 2023 on DKK 24.99 (DKK 38.85), corresponding to NOK 39.09 (NOK 52.28). The FO Farming segment achieved lower prices in Q2 2023 than in Q2 2022 and also lower harvest volume compared to Q2 2022. For H1 2023, the combined FO farming and VAP segments made an operational EBIT of DKK 537 million (DKK 951 million).


The SCT farming segment made an operational EBIT of DKK 71 million (DKK 41 million). The SCT Farming segment achieved higher prices and had a higher harvest volume in Q2 2023 compared to Q2 2022. In Q2 2023, the SCT farming segment had incident-based costs of DKK 43 million (DKK 56 million). For H1 2023, the operational EBIT was DKK 226 million (DKK -12 million).


During Q1 2023, the FOF segment

  • sourcing of raw material was 147,785 tonnes (97,610 tonnes),
  • the EBITDA margin was 17% (23%) EBITDA, and
  • fish feed sales amounted to 30,231 tonnes (31,243 tonnes).


For H1 2022, the FOF segments EBITDA was 17% (21%). During H1 2023, Havsbrún sourced 303,800 tonnes (175,581 tonnes) of raw material


The net interest-bearing debt amounted to DKK 2,911 million at the end of H1 2023, compared to DKK 2,664 million at year-end 2022. Undrawn credit facilities amounted to DKK 2,304 million at the end of H1 2023.


The long-term goal of the Board of Directors is that 30-50% of earnings per share shall be paid out as a dividend. The financial position of Bakkafrost is strong, with a solid balance sheet, a competitive operation and available credit facilities. The Annual General Meeting convened on 28 April 2023, decided to pay out a dividend of DKK 10.00, corresponding to NOK 15.63 per share. The total dividend of DKK 591 million (NOK 924 million) was paid out on 22 May 2023.


The equity ratio was 61% on 30 June 2023, compared to 62% at the end of 2022.




Stable supply in Q2 2023

The supply of salmon increased marginally by 0.3% in Q2 2023 compared to Q2 2022, incl. inventory movements. Without inventory movements, the supply increase was 0.9%, according to the latest estimate from Kontali Analyse.

Salmon prices increased 1% in NOK – decreased 15% in EUR

Salmon spot prices (in NOK) were 1% higher this quarter compared to Q2 2022 but were 15% lower in EUR due to the weak NOK. Prices in Q2 2023 were affected by strong demand for salmon and a low supply increase. However, with increasing supply towards the end of the quarter which led to increased price differentiation between small and large-sized salmon.

Low growth in 2023

In H2 2023, the global supply is expected to grow around 2-3%, excluding inventory movements. For the full year 2023, the global supply growth is expected to be around 2%, excluding inventory movements. In H1 2024, the supply growth is expected to be around 3%, excluding inventory movements.

Bakkafrost has a strong focus on ensuring a well-balanced flow to the different markets to increase diversification and mitigate market risk. Bakkafrost operates in the main salmon markets, Europe, the USA, and the Far East. Since the beginning of the war in Ukraine, Bakkafrost has stopped all trading with Russia.


In the Faroe Islands, growth has been strong in H1 2023. For the first time past 12 years, the biomass in the Faroese farms has increased in H1 instead of decreasing. Higher growth than harvest has increased the biomass by 20% from around 30kt up to 36kt, and during Q3, the biomass will follow the normal trend of the year with further growth, as feeding is peeking during Q3. The biological condition of the biomass is good. The backend-loaded harvest profile for 2023 means higher volume in H2, whereof around 17,000 - 18,000 tonnes gutted weight is expected to be harvested in the Faroe Islands in Q3. Bakkafrost expects to harvest larger fish in the Faroe Islands in H2 driven by healthy smolt and good healthy operation.

The expanded hatcheries at Norðtoftir and Glyvradal in the Faroe Islands are in operation and will be ramped up in production volumes during the next year. Combined, these capacity expansions increase the smolt production capacity in the Faroe Islands with around 6.5 million smolts of 500g. This is important to fulfil Bakkafrost's goal to build an annual smolt production capacity in the Faroe Islands of over 24 million smolts of 500g as part of the 2024-2028 investment programme.

The biological development in Scotland was improved during the first five months of 2023 with increased harvest weights and low mortality. Late in Q2 and continuing into Q3, biological development became more challenging. Environmental challenges affected fish being in their second summer in the sea, leading to higher mortality. This will affect the cost and mortality rates negatively in H2 and can compromise planned harvest volumes for 2023 in Scotland, with 5,000-6,000 tonnes, dependent on the continued biological development in H2 2023.

Bakkafrost has obtained good results treating the fish in Scotland with freshwater using the upscaled treatment vessel capacity. However, the recent environmental challenges emphasize the importance of having large and high-quality smolt that reduce the production cycle in the sea and hereby, also the biological risk. The risk picture is expected to be gradually transformed as Bakkafrost's large-smolt strategy materializes in Scotland. As demonstrated in the Faroe Islands, large high-quality smolt will have a lower risk exposure in the marine environment due to shorter production cycles in the sea and the robustness of the smolt. In addition, Bakkafrost is evaluating other measures and farming equipment in the marine farming operation with the potential to reduce the risk of environmental challenges.

The ongoing expansion of the Applecross hatchery is progressing, and the operation of the Applecross-4 expansion has started. In Q2 2023, the first batch of smolt weighing between 200-300g was released from Applecross, and in Q4 2023, a large batch of 200-300g smolt is planned to be transferred to marine sites. This is the first fish to be only one summer in the sea in Scotland. The capacity of the Applecross hatchery, will be gradually increased to full capacity during 2024, bringing the overall annual production capacity from Applecross to around 7 million high-quality smolts of around 500g.

In Q2 2023, the average weight of released smolt in Scotland was 125g, which is 24% higher than in Q2 2022.

In addition to the Applecross hatchery, Bakkafrost plans to build a second large hatchery at Fairlie in Scotland, increasing the total annual production capacity to around 15 million smolts of around 500g as part of the 2024-2028 investment programme.

Smolt release

Bakkafrost expects to release around 16 million large smolts in 2023 in the Faroe Islands and around 9.6 million smolts in Scotland. The number and the average weight of smolts released are key elements of predicting Bakkafrost's future production.

Million smolt released





















The average weight of the smolt released in Scotland in 2023 is expected to increase to around 140g. In 2023, the number of released smolt will be lower than in previous years as the focus is on stabilizing the operation before increasing the volume. In this respect, smolt quality is more important than the released volume.

In 2023, Bakkafrost expects to harvest around 63,000 tonnes gutted weight in the Faroe Islands and 30,000* tonnes gutted weight in Scotland, giving a total of around 93,000* tonnes gutted weight.

The estimates for harvest volumes and smolt releases in both geographies are dependent on biological development.

* Risk to be reduced by 5,000-6,000 tonnes


VAP (Value added products)

Bakkafrost's highly flexible value chain includes a state-of-the-art VAP factory with high capacity. This enables Bakkafrost to adapt well to the rapidly changing market situations.

Bakkafrost's long-term strategy is to sell around 40% of the harvested volumes of salmon as VAP products on contracts. The contracts are at fixed prices with a duration of 6 to 12 months. Bakkafrost’s VAP contract strategy is impacted negatively by the changes to the Faroese revenue tax made effective from 1 August 2023. The Faroese Government has however indicated that adjustments could be made to the revenue tax in order to reduce the negative impact on contracted sale of VAP products. Bakkafrost might revise the VAP contract strategy dependent on the outcome of this.

For 2023, Bakkafrost has signed contracts covering around 26% of the expected remaining harvest volumes in the Faroe Islands and Scotland combined.

FOF (Fishmeal, oil and feed)

The outlook of fishmeal and fish oil production is dependent on the availability of raw materials.

The ICES 2023 recommendation for blue whiting is 1,360 thousand tonnes, which is an 81% increase from the recommendation for 2022.

In 2023 Bakkafrost expects record-high production volumes of fishmeal and fish oil.

Havsbrún’s sales of fish feed in 2022 was 128,000 tonnes and is expected to increase to around 130,000 tonnes in 2023.

The major markets for Havsbrún’s fish feed are the internal Faroese and Scottish Farming segments.


On the Capital Markets Day on 6 June 2023, Bakkafrost announced a 6.3bn DKK investment plan for 2024-2028. The investments will enable a transformation of the operation in Scotland and provide sustainable growth in the Faroe Islands as well as Scotland.

The main purpose of the investments in Scotland is to replicate Bakkafrost’s successful operation in the Faroe Islands. Bakkafrost will build 2 large energy-efficient hatcheries in Scotland, enabling the implementation of Bakkafrost’s large smolt strategy and giving an annual production capacity above 15 million smolts at 500g. Having large smolt in Scotland will transform the performance, lower the biological risk and increase harvest volumes. In addition to building hatchery capacity, Bakkafrost plans to build a new processing plant to strengthen processing capabilities and increase flexibility in operation. Bakkafrost will also invest in more service vessel capacity to improve the mitigation of biological risk and improve the cost of operation. Further, Bakkafrost will make investments in marine site development.

The investments in the Faroe Islands include increasing annual hatchery production capacity to around 24 million smolts at 500g, cost-efficient repurposing of old hatcheries into broodstock operation, expansion of feed production capacity and growing sustainably by optimization of existing sites and new technology.

With the investment plan, Bakkafrost expects to sustainably grow the total annual harvest volumes to 165,000 tonnes in 2028. Over the same period, the total annual production capacity in Bakkafrost’s value chain will reach 200,000 tonnes gutted weight.


The long-term market balance in the global market for salmon products will most likely remain favourable for Bakkafrost. Bakkafrost has a long value chain and a cost-efficient production of high-quality salmon products and will likely maintain financial flexibility going forward.

In March 2022, Bakkafrost finalized a new sustainability-linked 700 mEUR multicurrency revolving credit facility agreement with an additional accordion option of 150 mEUR. The facility has a tenor of five years plus extension options of two years. In combination with Bakkafrost's high equity ratio, the facility gives the necessary financial strength and flexibility for the Group's investment plans aimed at significant organic growth and structural cost reductions in Scotland. It will also enable M&A's and further organic growth opportunities as well as support an unchanged dividend policy in the future.

Please find the Company’s Q2/H1 2023 report and the Q2/H1 2023 presentation enclosed.


  • Regin Jacobsen, CEO of P/F Bakkafrost: +298 235001 (mobile)
  • Høgni Dahl Jakobsen, CFO of P/F Bakkafrost: +298 235060 (mobile)

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

About Bakkafrost:

Bakkafrost is the largest salmon farmer in the Faroe Islands and the second-largest salmon farmer in Scotland. The Group is fully integrated from feed production to smolt, farming, VAP and sales. The Group has production of fishmeal, fish oil and salmon feed in the Faroe Islands and primary and secondary processing in the Faroe Islands, Scotland and Denmark. The Group operates sea farming and broodstock operations in both the Faroe Islands and Scotland. The Group has built a biogas plant in the Faroe Islands. The headquarter is located in the Faroe Islands, and the Group has sales and administration offices in Grimsby (UK), Edinburgh (Scotland), Boulogne-Sur-Mer (France), New Jersey (US) and Munkebo (DK). The Bakkafrost Group has 1,778 employees (full-time equivalents).


This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities. The securities referred to herein may not be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended. Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Canada or Japan.

Press Contacts:
Regin Jacobsen CEO
+298 23 50 01