Icelandic Salmon (ISLAX) Q2 2024 earnings summary

Executive summary

• Q2 2024 marked the end of a challenging period with significant biological issues, including disease outbreaks and high mortality, impacting KPIs, harvest volumes, and operational EBIT.

• Operating revenue for H1 2024 was EUR 37.2 million, down 48% year-over-year, with operational EBIT negative EUR 4.3 million, mainly due to extraordinary biological costs and lower volumes.

• Excluding one-off biological costs, operational EBIT was positive EUR 3.2 million.

• New licenses for 10,000 tonnes of sterile salmon were granted, increasing total MAB to 33,700 tonnes and expanding future production capacity.

• Achieved ASC certification for all production, supporting premium market positioning.

Financial highlights

• Q2 2024 operating income was EUR 9.7 million; operational EBIT was negative EUR 3.8 million, including EUR 3.9 million in one-off costs.

• EBIT per kilo in Q2 2024 was negative EUR 5.37; adjusted for one-off costs, it was EUR 0.19 per kilo.

• H1 2024 harvest volume was 3.5 thousand tonnes, down from 6.7 thousand tonnes in H1 2023.

• Net interest-bearing debt was EUR 65 million as of June 30, 2024; equity ratio stood at 65%.

• Net profit for H1 2024 was EUR 2.3 million; EPS was EUR 0.07.

Outlook and guidance

• Harvest volume guidance for 2024 reduced to 13,000 tonnes due to biological challenges; H2 2024 volumes expected to increase significantly compared to H1.

• 2025 volumes expected to be affected by H1 2024 biological issues; mitigating measures are being implemented.

• Contract share expected at 10% in Q3 and 12% for full year 2024.

• Underlying costs expected to decrease in Q3 due to better capacity utilization.

• Long-term growth potential up to 36,000 tonnes on existing licenses.