Danish aquaculture giant reports £16 million loss in Scotland, citing low harvest volumes and challenges with externally-sourced smolt, as strategic investments continue.
Danish salmon farming conglomerate Bakkafrost has reported a challenging quarter for its Scottish operations, contributing to a £16 million loss in the region during the second quarter of 2026. This setback occurred despite the group achieving a robust overall operational earnings before interest and tax (EBIT) of DKK 273 million, equivalent to approximately £31.3 million, a significant increase from DKK 65 million in the same period last year. The company’s global revenue climbed by 16% year-on-year to DKK 1.8 billion, primarily bolstered by record harvest volumes and improved margins from its Faroe Islands division.
The loss in Scotland marks a slight improvement from the DKK -146 million (approximately £16.73 million) operational loss recorded in the first quarter of 2026. This negative performance is largely attributed to substantially lower salmon harvest volumes, which fell by 55% to 3,145 gutted weight tonnes compared to the previous year. Bakkafrost has framed these reduced volumes as part of a deliberate “de-risking strategy” aimed at establishing the necessary infrastructure to produce large, high-quality smolt.
A critical factor impacting the Scottish results was a “biological issue” that affected fish at the Sgian Dubh and Ardyne farming sites. The company confirmed that these issues stemmed from a single batch of externally supplied smolt. While the wider Scottish salmon industry has recently reported record high survival rates, reaching 99.1% in March 2026 following significant investments in fish health and farm management, Bakkafrost’s specific incident highlights the persistent biological vulnerabilities within aquaculture. Such challenges, including parasitic sea lice and other diseases, are common concerns in open-net salmon farming, with potential environmental impacts on wild salmon populations and local ecosystems.
Bakkafrost is committed to enhancing its internal smolt production capacity to mitigate such risks. The company stated: “Bakkafrost remains focused on maintaining strong biological control and cost discipline across the Scottish operations. A central priority remains the continued transition towards large, high-quality smolt, which is expected to provide a stronger biological foundation through shorter marine production cycles, improved fish robustness and reduced biological risk.” This strategy aligns with a broader industry trend towards growing larger smolt in freshwater facilities to reduce their time in marine cages, thereby minimising exposure to sea lice and other pathogens.
However, the transition has not been without its challenges for Bakkafrost in Scotland. The average weight of transferred smolt from its Applecross freshwater operation was 219g, 10% lower than in Q2 2025. The overall average smolt weight for all releases in Scotland during the quarter was 137g, a 19% decrease compared to Q2 2025. This contrasts with the Faroe Islands, where Bakkafrost has extensive experience with larger smolt.
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Bakkafrost CEO Regin Jacobsen expressed dissatisfaction with the Scottish performance, stating: “We are not satisfied with the result in Scotland. Harvest volumes were substantially lower, and biological challenges affecting one batch of fish originating from externally sourced smolt had a significant impact on the result. Although these challenges were concentrated in this batch, biological performance at most other sites was stable.”
Despite the setbacks, the company’s freshwater operations in Scotland show signs of improvement. “Applecross continued to ramp up production, and the result from our Scottish freshwater operations improved year-on-year,” Jacobsen added. Looking ahead, Bakkafrost’s strategic priorities for its Scottish division remain clear: “strengthen biological control, improve cost efficiency and restore stable production volumes in Scotland, while maintaining disciplined execution of our investment programme. We maintain our 2026 harvest guidance of 117,000 tonnes.” Scotland remains a significant player in the global salmon market, ranking as the world’s third-largest producer of farmed Atlantic salmon, with the sector contributing nearly £1 billion annually to the Scottish economy and supporting thousands of jobs.
