Lerøy Seafood celebrates record revenue in 2021

Published on
February 17, 2022
Lerøy Seafood Group (LSG) reported revenues in excess of NOK 6.5 billion for the fourth quarter of 2021, a 26 percent increase.

Bergen, Norway-based fish-farming and fishing company Lerøy Seafood Group (LSG) reported revenues in excess of NOK 6.5 billion (USD 728.8 million, EUR 641.4 million) for the fourth quarter of 2021, a 26 percent year-over-year increase. At the same time, its operating profit before fair value adjustments more than doubled to NOK 902 million (USD 101.1 million, EUR 89 million).

According to LSG’s Q4 2021 report, the strong demand for seafood, better prices for its main products, and an improvement in underlying operations contributed to the earnings improvements seen across all of its segments.

"The demand for seafood is strong, giving grounds for optimism about the future. There is a positive development in activity level and prices realized. Compared with Q4 2020, earnings have increased in all segments," Lerøy CEO Henning Beltestad said. "We are reporting an all-time high revenue of NOK 23 billion (USD 2.6 billion, EUR 2.3 billion) for full-year 2021. Our vertically integrated value chain has proved resilient, and the development is in line with the group's growth strategy.”

In addition to the record revenue, Leroy’s 2021 operating profit increased by NOK 69 million (USD 7.7 million, EUR 6.8 million) to more than NOK 2.5 billion (USD 280.3 million, EUR 246.7 million).

Comprising the three Norwegian operations of Lerøy Aurora (located in Troms and Finnmark), Lerøy Midt (Nordmøre and Trøndelag), and Lerøy Sjøtroll (Vestlandet), the farming segment of the business harvested 51,332 metric tons (MT) gutted-weight salmon and trout in the closing quarter of 2021, up 6 percent from 48,349 MT in Q4 2020. Its overall earnings before interest and taxes (EBIT) per kilogram of NOK 13.70 (USD 1.54, EUR 1.35) was up on the NOK 6.10 (USD 0.68, EUR 0.60) achieved a year previously. Lerøy’s Q4 operating profit for the segment before fair-value adjustment related to biological assets was NOK 702 million (USD 78.7 million, EUR 69.3 million), compared with NOK 296 million (USD 33.2 million, EUR 29.2 million).

"The farming segment posted satisfactory results for the quarter. At the same time, growth in recent months has been slightly lower than expected, and we're reducing our harvest guidance for 2022 for the Farming segment in Norway from 190,000 GWT to 185,000 GWT," Beltestad said.

LSG said it expects its total 2022 harvest volume to be in the region of 208,000 MT, including a forecast of 23,000 MT from its associated companies, including newly expected volume from Scottish Sea Farms’s new acquisition, Grieg Seafood Hjaltland U.K..

In LSG’s wild catch segment, subsidiary Havfisk's total catch volume in the last quarter was 17,119 MT, compared with 12,619 MT in Q4 2020. Landings comprised 8,842 MT of cod, 1,543 MT of haddock, and 3,286 MT of saithe. Compared with Q4 2020, prices for cod, haddock, and saithe were up 16 percent, 22 percent, and 32 percent, respectively. LSG said the increased catch in the quarter was partly driven by higher quotas for 2021 than in 2020, and different catch patterns through the year. However, it also highlighted that profitability is being negatively affected by higher costs, particularly bunker costs, which were 34 percent higher in Q4 2021 than in the corresponding period of 2020.

In total, its bunker costs increased by NOK 28 million (USD 3.1 million, EUR 2.8 million) compared with the same quarter of 2020. Overall the segment reported an EBIT of NOK 73 million (USD 8.2 million, EUR 7.2 million) for Q4 2021, reversing a loss of NOK 10 million (USD 1.1 million, EUR 987,125) in the same period of 2020.

In his remarks, Beltestad said there is still “substantial potential” in further developing the demand for whitefish.

For the full-year 2021, the segment contributed EBIT of NOK 340 million (USD 38.1 million, EUR 33.6 million), up from NOK 205 million (USD 23 million, EUR 20.2 million) in 2020.

Lerøy’s VAP, sales & distribution (VAPS&D) segment reported Q4 2021 revenue of NOK 6.1 billion (USD 684.5 million, EUR 602.2 million), up from NOK 4.9 billion (USD 549.8 million, EUR 483.7 million) a year previously. Operating profit before fair value adjustment related to biological assets was NOK 202 million (USD 22.7 million, EUR 19.9 million), rising from NOK 176 million (USD 19.8 million, EUR 17.4 million) in Q4 2020.

LSG’s report states that the VAPS&D segment saw seafood demand increase in retail and foodservice channels and that underlying development is good, but that its performance continues to be impacted by start-up costs for the group's new factories in Spain and Italy.

Nevertheless, for the first time, VAPS&D has reported revenue over NOK 20 billion (USD 2.2 billion, EUR 2 billion) for the full-year 2021. Its operating profit before fair value adjustment increased from NOK 475 million (USD 53.3 million, EUR 46.9 million) in 2020 to NOK 630 million (USD 70.7 million, EUR 62.2 million) last year.

"Recent years have been impacted by restrictions linked to the COVID-19 pandemic. We have continued to develop and are proud of reporting the highest level of activity and earnings in the segment's history. Our vertically integrated value chain and proximity to end-customers have served us well under challenging market conditions," Beltestad said.

Photo courtesy of Lerøy Seafood

Contributing Editor reporting from London, UK

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