Adversity for Gigante Salmon
The company has previously reported that it has an ongoing dialogue, including with the Norwegian Food Safety Authority, regarding survival, fish welfare and the living environment in the tanks at its flow-through facility. Mitigation measures have so far not had the desired effect.
This will have consequences for both H2025 and H2026 fish generations, Gigante reports in a quarterly update.
The company said earlier this summer that it had had to make adjustments to fish barriers in the longitudinal stream sections.
Did not have the desired effect
“The purpose of the measure, which is still ongoing, was to improve fish health and sludge collection in the longitudinal flow basins. The measure has so far not had the desired effect on fish health, and the effect on sludge collection is still unclear. This is due, among other things, to delays in implementation and unexpected fish behaviour after installation,” the company now says.
Lower average weight and volume
According to the company, the fish in generation H2025 have largely concentrated in parts of the longitudinal flow basins, which has resulted in higher density for the fish, challenges with oxygen conditions, appetite, and feeding, as well as mechanical damage and fish in closed areas. This has contributed to lower average weight than planned.
“Based on the experiences gained throughout the summer, the company has implemented measures to resolve the fish behaviour and these will also be assessed on an ongoing basis for optimal operation for future generations of fish. Depending on the results of the improvements, the company may also consider reversing the installation of the fish barriers in whole or in part,” the company says.
Gigante Salmon estimates that generation H2025 will have a lower harvest weight and a weaker superior share than previously assumed.
“Lower harvest weight results in higher production costs per kilogram and lower income. The base case is 5,800 tonnes, with a range from 6,200 tonnes to 5,000 tonnes,” it writes.
Increased production costs
According to the company, a base case of 5,800 tonnes gives a production cost per kilogram of NOK 86 (head-on, gutted), with room for variation to NOK 91 HOG.
“At an upper yield range of 6,200 tonnes, the production cost is NOK 84 HOG to NOK 89 HOG, and at a lower yield range of 5,000 tonnes, the production cost is NOK 91 HOG to NOK 98 HOG.”
Also covers H2026
Generation H2026 is also expected to be negatively affected.
The company said delays in the introduction of a fishing ban in Norway had resulted in delayed movement of fish, which in turn has prevented Gigante Salmon from being ready to receive smolt at the planned time. Generation H2026 thus has a delayed smolt stocking, “which results in suboptimal conditions”.
This results in a lower expected harvest volume and a weaker superior grade. The base case is 5,800 tonnes, with a range from 6,200 tonnes to 5,000 tonnes.
“The base case of 5,800 tonnes gives a production cost per kilogram of NOK 76 HOG, with a margin of NOK 87 HOG. At the upper margin of 6,200 tonnes, the production cost is NOK 74 HOG to NOK 85 HOG, and at the lower margin of 5,000 tonnes, the production cost is NOK 81 HOG to NOK 94 HOG,” writes Gigante Salmon.
For generation H2026, macroeconomic conditions have also been taken into account, including the risk of increased feed costs due to El Niño’s impact on anchovy harvests.
Dialogue with the authorities
All measures that have an effect on fish health and the currently failing sludge suction effect will be followed up in dialogue with the Norwegian Food Safety Authority and the State Administrator, says the company.
“Gigante Salmon will continue the dialogue with relevant sector authorities, with the goal of finding the best possible solutions and ensuring good follow-up within the framework of current permits and regulatory requirements.”
Financing
To support further operations and planned production growth, available overdraft facilities in SpareBank 1 Nord-Norge were increased from NOK 140 million to NOK 240m during the quarter.
