High salmon, trout prices drive a doubling of profits at Leroy Seafood

Published on
May 12, 2017
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Norwegian fish farming and fishing company Leroy Seafood Group (LSG) has reported operating profit before fair value adjustments of almost NOK 1.3 billion (USD 151.3 million, EUR 139.1 million) for the first-quarter of this year, up from NOK 584 million (USD 68 million, EUR 62.5 million) in the same period of 2016. 

LSG’s revenue for the last quarter increased to NOK 5.5 billion (USD 640 million, EUR 588.6 million), compared with NOK 3.8 billion (USD 442.2 million, EUR 406.6 million) in Q1 2016. Compared with Q1 2016, its slaughter volumes of salmon and trout increased by 13 percent to 43,307 gross weight tonnage (GWT)

“For the first-quarter of 2017, Leroy Seafood Group can report their highest revenue and best operating profit of any quarter throughout the group’s history. The salmon and trout prices have remained very high throughout the first-quarter and are the most significant driver behind the record result reported by the group. However, release from stock costs remain at a high level and we are working hard to reduce these costs,” said Henning Beltestad, CEO of LSG. 

With the acquisitions of Havfisk and Norway Seafoods in 2016, LSG is now Norway’s largest whitefish corporation. These two businesses make up LSG’s new Wild Catch segment, with Norway Seafoods now being renamed Leroy Norway Seafoods AS (LNWS). 

“2017 has gotten off to a great start and the outlook is very promising. We very much look forward to further developing the market for whitefish,” said Beltestad.

Havfisk's total catch volume in Q1 2017 was 20,586 metric tons (MT), compared with 16,169 MT in Q1 2016. Of the harvest volume in Q1 2017, 9,425 MT was cod, 7,380 MT was haddock and 2,841 MT was saithe. Compared with Q1 2016, prices for cod were up 9 percent, prices for haddock were up 29 percent while prices for saithe were down 24 percent. 

The remaining quotas as of Q1 2017 are approximately 43,000 MT, on par with the remaining quotas at the same time last year. 

LNWS’s primary business is processing wild-caught whitefish. The company has eight processing plants, five of which are leased from Havfisk, and is the largest purchaser of cod from the coastal fishing fleet in Norway. 

The total contribution to operating profit made by these two companies in Q1 2017 was NOK 158 million (USD 18.4 million, EUR 16.9 million). 

LSG currently estimates a total harvest volume of 180,000 GWT salmon and trout for 2017, including LSG’s volume from associates and a wild catch volume in excess of 60,000 MT. 

But the group also expects its harvested volume of salmon and trout will be significantly lower in Q2 2017 when compared with both Q1 2017 and Q2 2016. Its Board of Directors therefore expects results before fair value adjustments for the current quarter to be substantially lower than in Q1 2017, but at the same time that the results before fair value adjustments for 2017 to be higher than in 2016.

Contributing Editor reporting from London, UK

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