Salmon farming company Grieg Seafood ASA (GSF) said it has seen a significantly improved return from its Shetland operations this year with higher than anticipated cost reductions and an estimated EBIT per kg of NOK 20 (USD 2.37, EUR 2.14) in the second-quarter and has therefore decided not to sell off that part of its business.
Earlier this year, Norway-headquartered GSF initiated a strategic review of its Shetland’s operations and considered selling all or part of its business in the region. However, the company board concluded that the bids received did not reflect the overall improvements currently being achieved in the region and that a sale would not be conducted.
“GSF will continue exploring other strategic alternatives at Shetland. The company anticipates a significant potential for biological and operational synergies through improved coordination between the parties in the region,” stated a new stock exchange statement.
The statement continued, “The production cycle at Shetland is currently being changed from 24 to 18 months. This change will partly mitigate the biological risk, and improved profitability from this is expected. Furthermore, a weaker pound sterling, especially upon the Brexit effect, [will] yield a competitive advantage for Shetland.”
GSF harvested biomass in Q2 that was intended for Q3 in order to reduce the biological risk. As a result, the preliminary harvest in Q2 was 16,200 metric tons (MT) (head-on gutted – HOG), up from the harvest guide of 14,000 MT given on 12 May.
