Troublesome 3Q for Grieg Seafood

Grieg Seafood on Tuesday posted a third-quarter EBIT (earnings before interest and taxes) of NOK 5.5 million (USD 982,000, EUR 655,500), down from NOK 60.3 million (USD 10.8 million, EUR 7.2 million) in the third quarter of 2008.

The Norwegian farmed salmon producer attributed its unfavorable third-quarter results to biological difficulties in Shetland and Canada and a reduced harvest in Norway.

In Shetland, Grieg was forced to harvest fish prematurely in one area hampered by a sea lice outbreak. In Canada, algae and oxygen problems were to blame. And in Norway, the company was compelled to reduce its harvest considerably due to higher fixed costs and lower salmon prices, which caused its sales revenues to drop 13 percent in the third quarter.

However, demand for salmon worldwide is strong despite the economic downturn. Grieg attributed the volatility in salmon prices to the surge in Norwegian production.

The company expects to yield 50,000 metric tons of salmon this year and 70,000 metric tons next year, with the majority of the increase coming from its Canadian subsidiary, Finnmark.

According to Grieg, the global salmon supply is projected to fall 7 percent in 2009 and another 2 percent in 2010 due to Chile's battle with an infectious salmon anemia outbreak.

Grieg also announced last week, Morten Vike was hired to replace Per Grieg Jr. as CEO.

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