Challenging year ends with Q4 loss for Grieg Seafood
With salmon prices heavily impacted by the COVID-19 pandemic, Grieg Seafood posted a fourth-quarter 2020 operating loss of NOK 17 million (USD 2 million, EUR 1.7 million), down from a profit of NOK 350.7 million (USD 41.5 million, EUR 34.2 million) achieved in the corresponding period of 2019.
The Bergen-headquartered Atlantic salmon producer harvested 20,271 metric tons (MT) of fish in the last quarter, down 12 percent from 23,010 MT a year previously. In this period, the Rogaland segment supplied 6,532 MT, Finnmark supplied 11,082 MT, and British Columbia, Canada, supplied 2,657 MT. Shetland was excluded from the Q4 results, following the company’s decision to divest those operations.
Grieg’s sales revenues in Q4 2020 amounted to NOK 1.16 billion (USD 137.4 million, EUR 113.1 million), representing a decrease of 20 percent compared to the same period last year, with the downturn driven by the lower harvest volume and spot prices. EBIT per kilogram was was a loss of NOK 0.80 (USD 0.09, EUR 0.08), compared to earnings of NOK 15.20 (USD 1.80, EUR 1.48) a year previously.
Grieg's average spot salmon price for Q4 2020 was NOK 43.20 (USD 5.11, EUR 4.21) per kilogram, down NOK 13.40 (USD 1.59, EUR 1.31) per kilogram compared to Q4 2019, and NOK 3.90 (USD 0.46, EUR 0.38) per kilogram lower than Q3 2020.
“As expected, the last quarter of 2020 was characterized by the COVID-19 pandemic. Lockdowns in Europe, shifting demand from hotels and restaurants to retail, impacted salmon prices significantly,” Grieg CEO Andreas Kvame said.
Kvame noted that operational results improved and stabilized during the fourth-quarter, with good biological performance in the company’s Rogaland and B.C. farming segments. In its Finnmark region, production was stable, but results were impacted by continued harvest of fish affected by the viral disease infectious salmon anaemia (ISA) during the third-quarter.
“Overall, 2020 has been a challenging year. We did not deliver on our ambitions, not only because of COVID-19 but also due to biological challenges in several regions. We have taken important steps to remedy the situation. We have strengthened our operational capabilities with a new and more farming oriented organizational set-up, and with a potential sale of our Shetland operations, we are narrowing our focus to Norway and Canada as strong production regions. We have also started our journey to take a stronger market position with a new and integrated sales and marketing organization,” Kvame said. “As we are starting to see the light in the end of the tunnel and a post-COVID-19 world, Grieg Seafood continues the journey of improvement, with the aim of creating long-term value for all our stakeholders.”
For the full-year 2020, Grieg’s operational EBIT fell to less than NOK 232.3 million (USD 27.5 million, EUR 22.6 million), from NOK 1.1 billion (USD 130.2 million, EUR 107.2 million) in 2019. Meanwhile, the total harvest decreased slightly from 71,700 MT to 71,142 MT.
Its sales revenues for the full year amounted to NOK 4.4 billion (USD 520.9 million, EUR 428.9 million), down from NOK 4.8 billion (USD 568.3 million, EUR 467.8 million), with the deviation mainly caused by the lower market prices.
A first-quarter 2021 harvest of 10,700 MT has been forecast, with Finnmark contributing 6,300 MT, Rogaland contributing 4,300 MT, and BC contributing 600 MT.
Grieg’s target harvest for this year is now 80,000 MT, with the longer-term aim to reach 130,000 MT by 2025.
Photo courtesy of Grieg Seafood