With regulatory and global trade uncertainties affecting the Canadian operations of Bergen, Norway-headquartered Grieg Seafood, the firm has announced plans to scale back in North America and, instead, hone in on growth in Norway.
In Grieg’s financial report for the fourth quarter of 2024, CEO Andreas Kvame acknowledged the “need for action” and confirmed the group would now focus its efforts on sustainable and profitable growth in its Norwegian operations while protecting the value of its Canadian assets.
“We have launched a transformation program to lay the financial and organizational foundation for profitable and sustainable growth going forward,” Kvame said. “This includes reallocating resources toward our strong Norwegian assets base while maintaining our position in Canada, making efforts to secure financial strength, and sharpening the operational initiatives we are running.”
To reflect these changes, the group has taken on impairment losses – reflected in its Q4 financials – in excess of NOK 1.7 billion (USD 153 million, EUR 146.7 million), with NOK 1 billion (USD 90 million, EUR 86.3 million) of that total relating to intangible assets and approximately NOK 700 million (USD 63 million, EUR 60.4 million) to property, plant, and equipment.
With the losses factored into its Q4 2024 report, Grieg reported lower profits for the period compared to the same three-month span in 2023.
Factoring in the Canadian impairments, Grieg reported a pre-tax loss for the quarter of NOK 1.59 billion (USD 143 million, EUR 137.1 million), compared to a profit of NOK 303 million (USD 27.3 million, EUR 26.1 million) in Q4 2023.
Its operational EBIT of NOK -74 (USD -6.7 million, EUR -6.4 million) in the quarter marked a decrease from NOK -67 million (USD -6 million, EUR -5.8 million) in the corresponding period of 2023.
Kvame also noted that the operational EBIT for the full year of 2024 was NOK 8 million (USD 719,914, EUR 690,055), compared with NOK 780 million (USD 70.2 million, EUR 67.3 million) in 2023.
This, the CEO said, “is not satisfactory.”
Nevertheless, Q4 revenues increased from NOK 1.94 billion (USD 174.6 million, EUR 167.3 million) to NOK 2.25 billion (USD 202.5 million, EUR 194 million), and the report also confirmed a higher total harvest of 23,551 metric tons (MT), versus 21,767 MT in Q4 2023.
Grieg’s overall harvest for 2024 totaled 77,704 MT, up from 72,015 MT in 2023. Though the harvest was higher, the firm only achieved an operational EBIT per kilogram of NOK 0.10 (USD 0.01, EUR 0.01) in 2024, compared with NOK 10.80 (USD 0.97, EUR 0.93) in 2023.
By operating region, Grieg’s Rogaland operations in Norway delivered strong operational and financial performance in Q4 2024, but Finnmark continued to face difficult operating conditions and adverse biological events, including a string jellyfish attack, according to the firm.
Growth was reported for Grieg’s Newfoundland operations in Q4, together with improved biological production in British Columbia (BC). However, in BC, Grieg maintained a “cautious approach” – putting strategic investments on hold while awaiting conclusions on the outlined transition for salmon farming in the region, according to the report.
Looking forward, Kvame explained the move to scale back Canadian operations will require a solid balance sheet. To achieve that, Grieg is contemplating issuing a NOK 1.5 billion to NOK 2 billion (USD 135 million to USD 180 million, EUR 129 million to EUR 173 million) hybrid bond loan that will add to the firm’s equity and strengthen financial flexibility.
To further strengthen its liquidity position, it is also in dialogue for the sale or leaseback of its smolt/post-smolt facilities in Adamselv, Finnmark, Norway.
Regarding this year’s harvests, Grieg is expecting harvest volumes of 18,800 MT in Q1 2025 and is targeting 84,000 MT for the full year, with the latter figure including an anticipated 5 percent decline in its Canadian volumes.
Rogaland and Finnmark are expected to deliver 14 percent growth, on the other hand, with a total projected harvest of 62,000 MT.
