Grieg posts Q4 results, expects BC salmon harvests to increase in 2015

Published on
February 19, 2015

Grieg Seafood ASA reported increased profits for the fourth quarter of 2014, thanks in part to increased sales revenues for the period.

The Norway-based Atlantic salmon farming group achieved sales of NOK 696.6 million (EUR 80.9 million, USD 92.5 million) for the quarter, reflecting an increase of 1.1 percent on Q4 2013. Also in Q4 2014, its harvested volumes dropped by 0.3 percent to 15,941 metric tons (MT), while prices were up 1.4 percent despite the trade sanctions against Russia resulting in a lower than expected price at the end of the year.

The group’s operational earnings before interest and taxes (EBIT) before fair value adjustment of biomass was NOK 140.1 million (EUR 16.3 million, USD 18.6 million), up from NOK 87 million (EUR 10.1 million, USD 11.6 million) in Q4 2013. However, its EBIT for the year as a whole was down slightly to NOK 340.9 million (EUR 39.6 million, USD 45.3 million) from NOK 348.3 million (EUR 40.4 million, USD 46.3 million) in 2013.

Its total salmon harvest for the year increased by 6,675 MT to 64,736 MT, and it anticipates similar levels of expansion in the next few years.

Production growth will be supported by a significant increase in its biomass in British Columbia (BC), Canada. Traditional production levels are now expected to follow, which should bring down costs in the region during the course of 2015, it said.

In Q4 2014, the EBIT before fair value adjustment of biomass for its BC operations was NOK 0.20 (EUR 0.02, USD 0.03) per kg, compared with a loss of NOK 13.40 (EUR 1.56, USD 1.78) per kg in Q4 2013. The harvested volume in Q4 was 620 MT, against 878 MT in Q4 2013.

In total, Grieg Seafood’s BC business unit harvested 6,257 MT of salmon in 2014, down from 6,739 MT in the previous year. Its harvest forecast for the region in 2015 is 13,000 MT, which is back in line with harvests of 13,576 MT, 13,236 MT and 13,682 MT achieved in 2012, 2011 and 2010, respectively.

In Finnmark (Norway) and Shetland (Scotland), meanwhile, the company believes some decline in the harvested volumes are likely, as a consequence of adjustment to the zoning and location structure in these regions. This will result in increased costs in 2015, but expected increases in output should follow in 2016, said the group.

The final allocation of green licenses in Finnmark was made in Q4 2014 and resulted in Grieg being awarded four licenses. The company expects this will provide the basis for considerable growth in the region.

Grieg Seafood has forecast a Q1 2015 harvest of 13,900 MT and a total for the year of 72,000 MT. It also believes limited supply-side growth will result in a strong market in the period ahead, while the continuing weakness of the Norwegian krone is also likely to contribute to high prices.

Earlier this month, Grieg Seafood announced the appointment of Andreas Kvame as its new CEO. Kvame will take up the role no later than 1 June.

Contributing Editor reporting from London, UK

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