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Bakkafrost second quarter core profit drops 17%, but beats forecast

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OSLO (Reuters) – Bakkafrost <BAKKA.OL> reported on Tuesday a smaller-than-expected drop in second-quarter core profit amid lower salmon output and a decline in prices, while the Oslo-listed fish farming company maintained its full-year production forecast.

The company’s April-June operational earnings before interest and tax (EBIT) dropped to 339 million Danish crowns (41.56 million pounds) from 408 million crowns in the previous year.

Analysts in a Refinitiv poll had forecast April-June operational EBIT to come in at 309 million crowns.

The price of farmed salmon was 9% lower in the second quarter than a year earlier, while its output fell by 2%, Bakkafrost said.

The salmon farming industry’s global production will likely grow less than previously expected, supporting a good outlook for the company’s fish farms, the company added.

The company, based in the Faroe Islands, is the first in a series of Oslo-listed fish farmers to report its second-quarter earnings this week, with market leader Mowi <MOWI.OL> and others to follow in the coming days.

While Bakkafrost maintained its own full-year target of producing 54,500 tonnes of fish, the company now believes the industry’s global growth will be in a range of 5%-6% in 2019 from 2018, while its previous forecast stood at 5%-7%.

The year-on-year growth in the third quarter will likely be around 5%, down from 8% in the second, Bakkafrost added.

Bakkafrost in June said it expects its fish harvest to surge by about 40% between 2019 and 2023. The company’s shares are up 23% year-to-date and have doubled in value since mid-2017.

(Reporting by Terje Solsvik, Editing by Sherry Jacob-Phillips)

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