Grieg achieves increased Q3 harvest and revenues

Published on
November 7, 2019

Grieg Seafood Group (GSF) harvested 21,028 metric tons (MT) of salmonids in the third-quarter of this year, an increase of 24 percent on the 16,941 MT produced in the corresponding period of 2018. This higher harvest volume enabled the Norway-headquartered producer to offset lower spot market prices to achieve sales revenues exceeding NOK 2 billion (USD 219.6 million, EUR 198.1 million), up 27 percent year-on-year.

According to its latest results statement, GSF’s operational earnings before interest and taxes (EBIT) – before fair value adjustment of biomass of NOK 154 million (USD 16.9 million, EUR 15.3 million) for the three-month period – was NOK 6 million (USD 658,814, EUR 594,395) lower than in Q3 2018, corresponding to an EBIT-per-kg of NOK 7.32 (USD 0.80, EUR 0.73), down from NOK 9.43 (USD 1.04, EUR 0.93).

Farming costs during the period remained stable compared to the same quarter last year.

“The third quarter was yet again characterized by solid performance for our Norwegian operations, with strong biological performance and continued high survival rates. Our post-smolt strategy in Rogaland is developing well and in Finnmark another two sites were ASC certified during the quarter – a testament to our strict focus on sustainability,” Andreas Kvame, CEO of Grieg, said. “We also began to see biological improvements in BC (British Columbia), for which 2019 has been characterized by challenging environmental conditions. These improvements are the result of diligent, persistent work by our dedicated employees as well as extensive operational and technical solutions implemented to combat issues such as algae and low oxygen levels.”

GSF expects its harvest volume in Q4 2019 to be 24,400 MT, with Rogaland producing 7,300 MT, Finnmark 10,400 MT, Shetland 3,000 MT and BC 3,600 MT. For 2019 as a whole, it anticipates that the harvest will be 82,000 MT.

Furthermore, the 2020 harvest guidance of 100,000 MT remains.

“For several years, we have been working towards our 2020 targets of harvesting 100,000 MT at a cost at or below industry average, with the underlying ambition of building a platform for sustainable growth beyond 2020. Although we have faced some biological challenges in Shetland and BC, our 2020 harvest target is well within reach and costs at our Norwegian operations are developing in line with our ambitions,” Kvame said. 

As the company approaches that 2020 target successfully, the company has set its sights to increasing those harvests even more, according to Kvame. 

“We are now looking beyond 2020 and setting the direction for the next five years as we launch our GSF 2025 strategy. We will aim to build on our existing platform to ensure continued growth and cost improvements and harvest more than 150,000 MT by 2025,” he said. “To scale our global operations, we will grow organically as well as through M&A activity. Furthermore, we will work to reposition Grieg Seafood from a pure commodity supplier to an innovation partner, increasing our presence downstream through partnerships, category development and brand cultivation. Thus, we aim to drive increased value creation as a global, integrated supplier of sustainably farmed salmon.”

GSF also said that it expects the global supply of Atlantic salmon for 2019 to increase by approximately 7 percent compared to 2018. With outlook for continued strong underlying demand, combined with limited growth potential in the short- to mid-term, prices are expected to increase going forward.  

Photo courtesy of Grieg Seafood Group

Contributing Editor reporting from London, UK

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