Leroy Q3 results ‘undermined’ by lower prices and Russian ban

Norwegian salmonid farmer and seafood processor Leroy Seafood Group posted a lower third-quarter operating profit before fair value adjustment of biomass of NOK 253 million (EUR 27.4 million; USD 29.4 million), down from NOK 303 million (EUR 32.8 million; USD 35.2 million) in the corresponding period of 2014.

The operating profit figure, as notified to the stock exchange on 14 October 2015, had been significantly undermined by political trade barriers involving Norwegian trout and the early harvest of salmon in central Norway, said Leroy.

The main trade barrier faced by the company has been the ban on imports of Norwegian salmon and trout into Russia, introduced on 7 August 2014.

Its result represented an operating profit before biomass value adjustment of NOK 6.20 (EUR 0.67; USD 0.72) per kg, down from NOK 7.30 (EUR 0.79; USD 0.85) per kg in Q3 2014.

"The operating profit for Q3 2015 bears witness to the difficulties faced on the trout market caused by the sustained political trade barriers and the early harvest of salmon, with lower prices realized and higher release from stock costs," said Henning Beltestad, CEO of Leroy.

"However, we are experiencing a strong growth in demand for Norwegian seafood, and the weaker Norwegian krone has boosted our competitiveness. We expect in the future to witness the results of the measures and investments made by the group to reduce production costs for salmon and trout."

For Q3 2015, Leroy reported turnover of NOK 3.3 billion (EUR 257 million; USD 383.7 million), up from NOK 3 billion (EUR 324.5 million; USD 348.8 million) in the same period in 2014. The operating profit for the last quarter included a loss of NOK 3 million (EUR 324,543; USD 348,786) from the sale of assets, compared to a corresponding gain of NOK 75 million (EUR 8.1 million; USD 8.7 million) in Q3 2014.

Compared with Q3 2014, the group’s volume of harvested salmon and trout fell by 2 percent.

For the first three-quarters of this year, the group achieved a turnover of NOK 9.9 billion (EUR 1.1 billion; USD 1.2 billion), up 6 percent from the corresponding period last year.

Operating profit before fair value adjustment of biomass for the same period was just over NOK 1 billion (EUR 108.2 million; USD 116.3 million), compared with NOK 1.4 billion (EUR 151.4 million; USD 162.8 million) in the same period of 2014.


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