Grieg Seafood Group (GSF) has shared its plans to ramp up its salmon harvest while also improving the sustainability of its operations.
Hosting a Capital Markets Update in Oslo, Norway, entitled "A salmon farming pioneer entering the digital era," the company confirmed that higher salmon prices have led to substantial growth in its revenues in recent years but that its harvest volumes have remained stable (62,598 metric tons – MT last year). However, by improving its utilization of current capacity, it now has the ambition to reach 100,000 metric tons (MT) in 2020.
Its harvest guidance for 2018 is 75,000 MT.
At the same time, GSF is aiming for production costs to be in line with or below the industry average, and is targeting NOK 37.90 (USD 4.50, EUR 3.87) per kg, also by 2020. In 2017, these costs were NOK 43.40 (USD 5.15, EUR 4.43) per kg.
It said that this reduction would mainly be driven by better operational efficiency from higher volumes and improved biology, and that to secure longer term growth, additional opportunities would be pursued, such as acquiring new capacity, acquisitions and joint ventures and the development of new concepts.
"Our objective is to ensure sustainable growth in the years ahead by combining great people, nature and technology. We believe salmon will be an increasingly important food source globally, and that Grieg Seafood will be able to create value for multiple stakeholders, including the communities in which we operate, our employees and shareholders, while we provide salmon to the world," said CEO Andreas Kvame.
Last year, the company which farms in four regions – Rogaland and Finnmark (Norway), Shetland (United Kingdom) and British Columbia (Canada) – achieved record revenues in excess of NOK 7 billion (USD 831.4 million, EUR 715.3 million). In comparison, its 2010 revenues stood at less than NOK 2.5 billion (USD 296.9 million, EUR 255.5 million), based on a larger harvest of 64,214 MT.
In the second-quarter of this year, it posted operational earnings before interest and taxes (EBIT) of NOK 426.3 million (USD 50.6 million, EUR 43.6 million) before fair value adjustment of biomass, up from NOK 392.3 million (USD 46.6 million, EUR 40.1 million) in Q2 2017. GSF’s operating income for the three-month period increased by 14 percent year-on-year to more than NOK 2.3 billion (USD 273.2 million, EUR 235 million).
Growth was underpinned by a record Q2 salmon harvest of 22,568 MT, as well as high prices and strong demand. But, its EBIT per kg fell to NOK 18.89 (USD 2.24, EUR 1.93).
