Bakkafrost’s Scottish Hatchery Bet Cannot Stop Seawater Losses

Bakkafrost’s Scottish seawater farms posted a DKK 110 million operating loss in the fourth quarter of 2025, twice the year-earlier hole, after Pasteurella skyensis hit Portree. That is about £12.8 million. The Faroese parent still called its Applecross hatchery a cornerstone of the Scottish business in the same results.

Eight months later the hatchery had a royal opening and an innovation award, and Scotland was still in the red. Harvest there is being cut on purpose until larger smolts take over at sea.

Scotland’s Seawater Farms Lost DKK 110 Million

On 9 February 2026, Bakkafrost reported group operational EBIT of DKK 295 million for the fourth quarter, on 27,891 gutted-weight tonnes, up from DKK 280 million on 20,478 tonnes a year earlier. Almost all of the extra fish came from the Faroe Islands, where farming EBIT was DKK 7.34 per kilo.

Scotland as a region booked revenue of DKK 303 million and an operating loss of DKK 97 million, against a DKK 31 million loss in the fourth quarter of 2024. The seawater farming line was worse than that regional total. Farming Scotland harvested 4,579 tonnes at DKK -23.92 per kilo, which is a segment loss of DKK 110 million, double the DKK 55 million loss on 3,840 tonnes the year before.

Incident-based costs in that farming segment were DKK 55 million, up from DKK 19 million. Chief executive Regin Jacobsen said the quarter’s finances were “not satisfactory,” blaming high global salmon supply for most of the price pressure and the October emptying of Portree for the Scottish hit.

FAROES VERSUS SCOTLAND, Q4 2025

Group harvest for 2025 reached 106,823 tonnes, 16,167 tonnes more than in 2024. Scotland’s share fell from 27,880 tonnes to 23,185. The Faroes carried the growth. Scotland carried the mortality bill, including the high costs from the Scotland salmon outbreak already flagged in the third quarter.

Portree’s Small Fish Pulled the Quarter Down

Pasteurella skyensis is named for the Isle of Skye, where isolates go back to the mid-1990s. In September 2025 it showed up again at Bakkafrost’s Portree and Portree Outer sites. The company harvested the farm out in October rather than hold infected fish in the pens.

Jacobsen told the results presentation that Portree contributed 900 tonnes at 2.3 kilos. Strip those fish out and the Scottish average harvest weight in the quarter was 5.9 kilos; leave them in and it falls to 4.3 kilos. He said growth “has actually improved in Scotland,” apart from Skye.

On an earnings call he also said input mortality at Portree was 19 per cent in the first 90 days, and that the fish “did not have the capability to handle the stress events that they were going through.” A Scottish Government release on a later information request confirmed a Fish Health Inspectorate visit in September, on 24 September 2025, to both authorised sites (cases 20250361 and 20250362). Inspectors already had the mortality records, though they had not themselves added up that 19 per cent figure at the time.

THE PORTREE EMPTYING

1. September 2025: Pasteurella skyensis is identified at Portree; inspectors attend both sites on 24 September.
2. October 2025: The company harvests and empties the farm, taking 900 tonnes at 2.3 kilos and putting the site into fallow.
3. 9 February 2026: Fourth-quarter results assign DKK 55 million of Scottish farming incident costs largely to that event.
4. July 2026: Industry mortality tables show Portree stocked again, with Portree Outer still fallow.

Excluding Portree, Bakkafrost said mortality in November and December sat below the average of the previous five years. The qualifier does a lot of work. One early harvest was enough to double the seawater loss and knock a kilo and a half off the Scottish average weight.

Applecross Is Still Only a Third Full

The company’s answer is a land plant. Applecross, a recirculating hatchery at Kishorn in Wester Ross, is built to hold smolts in freshwater until they are large enough to spend less time in cages. Official capacity is about 3,500 tonnes. Jacobsen’s Q4 line treated the ramp as already under way.

Production volumes of large, high-quality smolt are increasing, making Applecross a cornerstone in our Scottish operations. We remain firmly focused on a steady and controlled ramp-up, prioritising biological stability and predictable execution.

Regin Jacobsen, chief executive, Bakkafrost Q4 2025 report

The Princess Royal opened the modernised site on 13 May 2026. Bakkafrost Scotland calls it the United Kingdom’s largest freshwater recirculating system and says it supports about 40 permanent jobs. The pitch is “one summer at sea”: bigger smolts, a shorter marine cycle, less disease risk.

At the February presentation Jacobsen said larger smolts would cut the marine cycle to 14 to 15 months from 20 months, and that 2026 to 2027 would be the transition. He also said Applecross would reach full biomass in the first quarter of 2027. By the second-quarter presentation in August, the same plant was running at 35 per cent of capacity.

Talking after those numbers, Jacobsen said the plant “had a demanding start-up period, including technical and biological challenges,” and that managers had chosen stability and biosafety over a fast volume push. “The escalation at Applecross has taken longer than we originally planned,” he said. Freshwater Scotland’s loss did narrow. The sea did not wait for the tanks to fill.

Why Bakkafrost Cut the 2026 Scottish Harvest

Scotland is meant to produce about 20,000 tonnes in 2026, down from 23,185 tonnes in 2025. The Faroes are guided at about 97,000 tonnes, taking the group to about 117,000. In February the Faroes number was still 92,000; Scotland was already 20,000. The cut on the Scottish side is the plan, not a surprise.

Jacobsen now describes that plan as de-risking while large smolt capacity is built. Second-quarter figures show what de-risking looks like on a P&L. Scotland harvested 3,145 tonnes, against 7,034 a year earlier, and the regional operating loss was DKK 139 million, compared with DKK 146 million. Farming Scotland’s EBIT was DKK -44.26 per kilo, with DKK 31 million of incident-based costs. Revenue from Scotland halved to DKK 213 million from DKK 431 million.

The Faroes, in the same quarter, harvested 26,749 tonnes, up 67 per cent, and made DKK 411 million of operational EBIT. Group operational EBIT was DKK 273 million, against DKK 65 million a year earlier. Jacobsen said he was satisfied with that improvement and “not satisfied with the result in Scotland.” The board had already paid a DKK 3.45 dividend in May, DKK 205 million in total, out of Faroese cash generation.

Smolt numbers in Scotland are rising even as harvest falls, which is the point of the lag. The company transferred 3.9 million smolts there in the second quarter, against 0.9 million a year earlier, and 4.9 million in the first half against 1.5 million. Full-year Scottish transfers are guided at about 10.0 million at an average 179 grams, including fish bought in. Faroese transfers are guided at about 20.0 million at about 440 grams. The weight gap is the strategy in one line.

Bought-In Smolts Keep Failing at Sea

Applecross smolts transferred in the second quarter averaged 219 grams, 10 per cent below the same quarter of 2025. Across all Scottish releases the average was 137 grams, 19 per cent lower, because so many fish still come from other hatcheries and from outside suppliers. Almost 1.5 million of the smolts stocked in Scotland in that quarter were bought in.

Those bought-in fish are where the 2026 biology broke. Jacobsen said a single externally sourced batch hit the Sgian Dubh and Ardyne sites and “had a significant impact on the result,” while “biological performance at most other sites was stable.” In July, Sgian Dubh still showed a 17.6 per cent monthly mortality rate, listed as gill health, on the producer-compiled tables.

The same tables recorded 48.2 per cent cycle mortality at Vuia Mor in Loch Roag on Lewis, a site fallowed in July. A company spokesperson said the losses were “largely concentrated within one externally sourced batch of smaller smolts that experienced significant gill health challenges,” and pointed again at the “One Summer at Sea” shift toward in-house large smolts.

WHAT THE 2026 MORTALITY TABLES SHOW

• Vuia Mor: 48.2 per cent dead over the full cycle, fallowed in July, blamed on smaller bought-in smolts and gill health.
• Sgian Dubh: 17.6 per cent monthly mortality in July, gill health, the same batch problem named in the second-quarter report.
• Portree: Restocked in July after the 2025 emptying, logged at 0.0 per cent that month, with Portree Outer still empty.
• Applecross share: Still a minority of Scottish stockings, with average release weight across Scotland at 137 grams in the second quarter.

The hatchery collected a Highlands and Islands Enterprise award for innovation in September, in the same month Vuia Mor’s cycle death rate was confirmed. The award is for the plant. The mortality is in the lochs the plant is supposed to supply.

An Empty Skye Site and a Tesco Ban

Portree was already fallow when the argument moved from the results slides to the supermarket aisle. In late January 2026 Tesco suspended purchases from the site after the Green Britain Foundation released drone footage filmed between 7 and 13 October, during the emptying. Bakkafrost Scotland called it “an isolated occurrence” at Portree in autumn 2025 and said teams had been “working under extremely challenging conditions to responsibly manage a naturally occurring environmental event.”

The company said it co-operated with the RSPCA and that the charity was satisfied with the actions taken. Tesco said it had suspended the farm to investigate. There were no fish left to buy. The footage still did the commercial damage a fallow site was meant to avoid, and it did so weeks before Jacobsen went in front of investors to talk about Applecross as a cornerstone.

That is the gap the hatchery cannot close on a press-release timetable. A land plant can change the size of the fish that go to sea. It cannot unsay a Skye harvest of 2.3-kilo salmon, and it cannot keep a retailer on side while the cages are being emptied on camera.

The 2019 Scottish Purchase Is Still Being Paid For

Bakkafrost completed the acquisition of a majority stake in The Scottish Salmon Company on 8 October 2019, taking its holding to about 77.8 per cent after paying NOK 3.76 billion for the Northern Link block at NOK 28.25 a share. The wider deal was valued at £517 million. Seven years on, the Faroese farms are at record biomass. The Scottish farms are still the segment that turns a group beat into an apology.

Jacobsen’s priorities after the second quarter were unchanged: biological control, lower costs, and “stable production volumes in Scotland,” with the group holding its 2026 harvest guidance of 117,000 tonnes. He said the benefits of large, high-quality smolt should become “increasingly visible from 2027 onwards.” That is the same window he named in February, after Portree, and it now has to cover Vuia Mor and the bought-in batch at Sgian Dubh and Ardyne as well.

Applecross can still do what the company says, if the tanks reach full biomass and the marine cycle really shortens. Until that biomass is in the water, Scotland’s contribution is a smaller harvest, another eight-figure operating loss, and a hatchery running at a third of the capacity already being asked to carry the story.