Grieg Seafood posts best ever quarter results, downgrades 2017 harvest forecast
Norway-headquartered salmonid producer Grieg Seafood ASA achieved operational earnings before interest and taxes (EBIT) of NOK 456 million (USD 54.8 million, EUR 51.5 million) before fair value adjustment of biomass in the fourth quarter of last year. The total is up tenfold from NOK 43 million (USD 5.2 million, EUR 4.9 million) in the corresponding period of 2015 and marks the best quarter in the company’s history.
The volume of fish harvested in the last quarter totaled 20,917 metric tons (MT), an increase of 37 percent year-on-year.
Group sales revenues in Q4 2016 reached almost NOK 2.1 billion (USD 252.4 million, EUR 237.1 million), an increase of 74 percent year-on-year.
In its results statement, Grieg said that in Norway, the proportion of salmon sold on fixed-price contracts stood at 32 percent in Q4 2016, and this was a factor which reduced the level of realized prices. The proportion of fixed price contracts is expected to be around 60 percent in Q1 2017 due to a low harvest volume in the quarter.
Grieg’s total harvest volume in the current quarter is likely to be around 8,400 MT. For 2017 as a whole, the figure is expected to be 70,000 MT, up eight percent on last year, but 3,000 MT less than planned, due to an outbreak of infectious salmon anaemia (ISA) in Finnmark, Norway.
The company highlighted that a stated goal is to reduce its cost level to the industry average or lower. The company will also be aiming to increase production by 10 percent annually in the period 2018-2020. In addition, it is focused on improving operating efficiency, including increasing production per plant and per license, as well as reducing costs per kg.
One of the key steps being taken is to set out bigger smolt, which will make it possible to shorten the production time in the sea. An increase in the number of smolt is also decisive to achieve growth and lower costs, the company said.