Grieg Seafood reimbursed millions for Newfoundland acquisition
Bergen, Norway-headquartered Atlantic salmon farmer Grieg Seafood ASA is to receive a reimbursement of NOK 40 million (USD 4.6 million, EUR 3.9 million) from its purchase of the Grieg Newfoundland AS operation, which was completed in April 2020, the group has confirmed in a filing to the Oslo Stock Exchange.
Alongside its integrated annual report 2020 statement, Grieg said the financial return follows a review of the NOK 620.5 million (USD 71.9 million, EUR 60.9 million) deal, which has taken into account “information obtained about facts and circumstances that existed as of the acquisition date.”
In accordance with International Financial Reporting Standard (IFRS) 3.45, the measurement period for the purchase price allocation (PPA) can be up to 12 months from the transaction date, and upon preparation of the annual accounts for 2020, the company conducted a reassessment of the preliminary PPA, it said.
“Due to a special warranty regarding the expected cost overrun on the RAS (recirculating aquaculture system) facility, the seller shall reimburse NOK 40 million to the purchaser. The amount has been recognized in the adjusted PPA as indemnification assets and presented on a separate line item in the group's statement of financial position. The preliminary amounts recognized in Q2 2020 have been adjusted retrospectively in accordance with IFRS 3,” Grieg said.
The Grieg Newfoundland project includes exclusivity for salmon farming in Placentia Bay, which has a farmable area bigger than the Faroe Islands. In addition to comprising licenses for 11 sea sites at different stages of approval, the project also incorporated a high-end RAS facility that is under construction. The project has a long-term annual harvest potential of 30,000 to 45,000 metric tons (MT) of salmon.
In its meeting on 25 March, the group’s board approved the annual report, including its sustainability report and its financial accounts. This confirmed that its profit before tax for the financial year 2020 was a loss of NOK 304 million (USD 35.2 million, EUR 29.8 million), with a profit after tax representing a loss of NOK 316 million (USD 36.6 million, EUR 31 million). The corresponding figures in the published fourth-quarter 2020 report were a loss of NOK 301 million (USD 34.9 million, EUR 29.5 million), and NOK 270 million (USD 31.3 million, EUR 26.5 million), respectively.
Total equity at year-end 2020 came to NOK 4.37 billion (USD 506.3 million, EUR 428.9 million), compared to NOK 4.41 billion (USD 510.9 million, EUR 432.9 million) reported in the Q4 2020 results.
With farms in Finnmark and Rogaland in Norway, British Columbia and Newfoundland in Canada, and Shetland in the United Kingdom, Grieg is targeting a harvest of 130,000 MT in 2025.