Nordlaks quadrupled sales, profit in 2022

Family-owned Norwegian salmon farmer Nordlaks Group posted significant increases in both its turnover and profit for 2022, with company CEO Eirik Welde pointing to last year’s strong salmon prices as a key driver of the upturns.

According to its 2022 results posted on 21 August 2023, Nordlaks’s turnover increased from just over NOK 1 billion (USD 93.4 million, EUR 87 million) in 2021 to NOK 4.45 billion (USD 415.8 million, EUR 387.1 million) last year, while its profit after tax soared from NOK 786 million (USD 73.4 million, EUR 68.4 million) to a record NOK 3.61 billion (USD 337.3 million, EUR 314.1 million) year over year, following the trend of salmon-farming companies across Norway posting record-high profits.

“This is linked to very good salmon prices throughout 2022,” Welde said in a statement, noting prices were up by around 10 percent on average compared to the previous year. He also confirmed that much of the price increase – some 40 percent to 50 percent – was due to the effect of a weak Norwegian kroner against typical trading currencies such as the euro and the U.S. dollar.

“We cannot expect such figures going forward,” Welde said.

Price increases in feed, energy, freight, and packaging led to an 11 percent increase in operating costs in 2022 for the company. Nonetheless, Nordlaks continued to ramp up salmon production in 2022, increasing the volume from 2021’s 48,000 metric tons (MT) to 54,000 MT. Last year’s total slaughter volume was 75,000 MT, compared with 85,000 MT previously.

In advance of the aquaculture resource rent tax approved by the Norwegian Parliament on 31 May, the Stokmarknes-headquartered company completed investments amounting to around NOK 1.4 billion (USD 130.8 million, EUR 121.8 million). Investments made ahead of the tax’s implementation included a NOK 400 million (USD 37.4 million, EUR 34.8 million) cage factory on Børøya, which opened in December. The company also signed a contract in February 2022 to secure a semi-closed tank called “Hydra.” The tank is under construction in Turkey, with its total cost estimated at around NOK 1 billion (USD 93.8 million, EUR 87.6 million).

Nordlaks said the resource rent tax will dictate how much the company can invest in the future. It said it was still uncertain about how the resource rent tax is being implemented; for example, the Norwegian Ministry of Finance has a proposed price advice out for consultation. The company said it paid NOK 265 million (USD 24.8 million, EUR 23.1 million) in tax on ordinary income in 2022 but now expects a twofold to threefold increase in this figure in the years to come.

“The proposal that is out for consultation carries a high risk of having to pay tax on income that hasn’t been earned. Salmon is compared to petroleum, where price advice has been introduced, but salmon is not a uniform product like petroleum. The price of salmon is determined by far more factors, such as quality, size, certification, and production area,” Welde said.

The company previously threatened to totally freeze its Norwegian investments had the tax been approved at its originally proposed 40 percent rate.

Nordlaks also confirmed changes in its companies’ board composition. Amalie and Sivert Berg are entering as alternate members on the board of the parent company Nordlaks Holding, while Therese Berg, who is the factory manager at Nordlaks Products, has become a board member for several of the subsidiaries in the group. All three are children of Inge Berg, the founder of Nordlaks. Therese Berg and Robin Berg, the latter of whom is also a son of Inge Berg, are already on the board of Nordlaks Holding.

The company also recently increased the number of lice lasers it uses, sourced from Stingray Marine Solutions, for the removal of sea lice from salmonids, to a total of 1,000.

“Finding gentle ways to get rid of salmon lice is a challenge for the entire aquaculture industry, and we are happy that we are constantly getting better tools, such as the lasers from Stingray, to help us,” Area Manager for Troms i Nordlaks Trond Edvardsen said. “Because we believe in lasers as part of a holistic, effective fight against salmon lice, we are constantly increasing the number of lasers. Getting rid of salmon lice with a laser does not affect the fish negatively, and that is crucial for us.”

Photo courtesy of Nordlaks