Bakkafrost (BAKKA)

Business Overview

Bakkafrost farms salmon in two places that earned opposite results in FY2025. Its Faroese farming made DKK 5.17 of operational EBIT on every kg, and its Scottish farming lost DKK 17.77. Operational EBIT is the profit measure salmon farmers report that leaves out the accounting revaluation of fish still in the sea, so it tracks the fish actually sold.

It harvested 106,823 t gutted weight, 83,638 t in the Faroe Islands and 23,185 t in Scotland. It reports in DKK and lists on Oslo Børs in NOK; the Faroese figure is about NOK 8.1/kg at the 2025 average DKK/NOK rate (Norges Bank). It files no farming cost per kg, so operational EBIT per kg is the figure to compare; the cost-per-kg guide explains why the two measures answer different questions.

How the Numbers Read

The two margins do not average out. Weighted by harvest, Scotland's loss (about DKK 412m) almost cancelled Faroese farming profit (about DKK 432m). Most of group operational EBIT of DKK 888m came from Bakkafrost's other businesses, such as its fish feed.

Scotland's losses were biological. Its Scottish farming recognised DKK 172m of incident-based mortality in FY2025, the cost of fish lost in specific events. DKK 55m of it came in Q4, mainly at its Portree site after an outbreak of Pasteurella, a bacterial disease. The biological risk guide shows how mortality can erase one region's margin while another holds.

Capacity is disclosed differently from Norway. Bakkafrost reports the fish actually in the sea, 75,024 t at 31 December 2025, which is the harvest still to come, not a licence limit. The Faroes set no fixed biomass cap per licence. Licences run for 12 years, renewal is in effect guaranteed if conditions are met, and the number of fish is approved for each production cycle on the farmer's record for environment, fish health, lice and mortality; there are no Norwegian-style traffic lights (Falkland Islands Government report after a May 2025 visit to Faroese regulators). The MAB guide contrasts this with Norway's licence caps.

Net interest-bearing debt was DKK 3,897m at 31 December 2025, 4.4 times FY2025 group operational EBIT.

Valuation Framework

EV per kg for Bakkafrost works as it does for Norwegian farmers: farming enterprise value divided by annual gutted-weight harvest, with non-farming assets such as the feed business taken out where possible. Model Scotland's losses and its smaller scale region by region, since a Norwegian farmer's figure fits neither.

Tax differs too. Norway's 25% resource-rent tax on salmon farming does not apply. The Faroes tax salmon farming revenue instead. Bakkafrost booked DKK 174m of revenue tax in FY2025, DKK 158m of it in Faroese farming, and adds it back to reach operational EBIT; a cash-flow valuation has to take it off again. Convert DKK results such as EBIT per kg at the average rate for the period they cover, and balance-sheet and market values at the rate on the valuation date.

What to Watch in the Financials

Scotland's path to breakeven. Until Scotland stops losing money, the group's farming profit rests on the Faroes. Each quarter's incident mortality, with Scotland's harvest weights, shows whether the biology has changed.

Harvest mix. At FY2025 margins, each percentage point of harvest that moves from the Faroes to Scotland takes about DKK 0.23/kg off farming EBIT per kg (5.17 + 17.77 = 22.94, times 1%).

Key Risks

Concentration in the Faroes. 78% of FY2025 harvest came from the Faroes, so Faroese biology or regulation reaches the whole company.

Salmon price. A fall in the salmon price comes almost straight off EBIT per kg, because farming cost is committed before harvest. On the Faroese margin, each DKK 1/kg is about a fifth of the profit.