‘Substantially’ lower salmon prices hit Lerøy
“Substantially” lower prices of Atlantic salmon took a bite out of Lerøy Seafood Group’s first-quarter results, which the Norwegian company reported on Tuesday.
The company’s turnover fell to NOK 2.16 billion in the first quarter of 2012 from NOK 2.23 billion in the same period in 2011. Lerøy’s operating profit (before fair value adjustment of biomass) also took a hit, sliding from NOK 445.8 million in the first quarter of 2011 to NOK 103.2 million in the same period of 2012, while its profit (before tax and fair value adjustment of biomass) dropped to NOK 89.4 million in 2012 from NOK 458 million in 2011.
Additionally, the company expensed a total of NOK 50 million in write-offs and other costs related to the close of Lerøy Hydrotech’s slaughterhouse in Kristiansund, Norway.
Lerøy harvested 36,300 metric tons of salmon and salmon trout (gutted weight) in the first quarter of 2012, up significantly from 27,900 metric tons in the same period in 2011.
Looking ahead, Lerøy expects significant growth in the global salmon supply this year, and demand is shaping up to be “extremely good,” thanks to lower prices. However, the Lerøy board anticipates “considerably poorer” results in the second quarter of 2012, compared to the same period last year.