Grieg Seafood has seen biological improvements across many of its farming regions to start 2024, but the group’s operations in the Finnmark region of Norway faced several challenges, including the Spironucleus salmonicida parasite and string jellyfish.
In the Bergen, Norway-headquartered salmon producer’s Q1 2024 report, CEO Andreas Kvame said along with low seawater temperatures, the challenges impacted fish health, welfare, quality, and survival rates.
“I am not satisfied with the fish welfare situation during the quarter,” Kvame said. “We have and continue to implement a variety of improvement measures, including a new vaccine against winter ulcers, a UV-filter against [the] Spiro [parasite], and sea lice treatment capacity with improved welfare. We are also making changes to our production planning and reducing biological risk as our post-smolt strategy is gradually rolled out in our regions.”
Kvame said it will take time to see the results of these measures, but throughout 2024, and especially by next winter, Grieg is expecting significant improvements.
Grieg's other farming regions saw stronger biological performance in Q1 2024, including Rogaland, where the company enjoyed reduced costs and better price achievement, Kvame said.
In Canada, the company reached a milestone with the completion of its first harvest in Newfoundland.
“We have proven that it is possible to farm salmon with good welfare, low impact, and high quality in Placentia Bay,” he said. “This is strengthening our faith in Newfoundland as a future, robust farming region, which will generate jobs and shared value to the surrounding rural communities.”
Still, Kvame said significant investments are needed to develop Grieg’s Canadian operations, and the search for long-term investment partners in the North American market, originally announced in November 2023, remains ongoing, Kvame said.
As the search for a Canadian partner carries on, rumors have begun to swirl that Grieg may be considering selling its Canadian operations – or the company as a whole.
According to Norwegian business newspaper Finansavisen, brokerage firm Arctic Securities released a report titled “Could the entire group be sold?” following Grieg’s Q1 2024 results presentation, in which it speculates whether salmon-farming firms Mowi or Cermaq might be interested in acquiring all of Grieg’s operations. Other companies may only be interested in portions of Grieg’s operations, such as SalMar with Grieg’s Finnmark operation, Arctic Securities posited.
The brokerage firm placed a loose price tag on such a purchase at around USD 1 billion (EUR 924 million). For now, though, such a deal remains purely speculative, it said.
Also in Q1 2024, Grieg announced it is establishing a 10,000-metric-ton (MT) value-added processing plant to serve both of its Norwegian regions. This NOK 130 million (USD 12.2 million, EUR 11.2 million) facility will be located at Oslo Airport City, Gardermoen, Norway. It is expected to be up and running in summer 2025.
“This is a key step toward delivering on our downstream strategy, where we aim to work closer with our customers and increase value creation from our fish.”
Grieg’s Q1 2024 operational EBIT was NOK 292 million (USD 27.3 million, EUR 25.2 million), compared with NOK 385 million (USD 36 million, EUR 33.2 million) in the corresponding period of 2023. Its total harvest volume for the quarter was 21,075 MT, compared to 15,357 MT in the year-ago period. This gave the firm operational EBIT per kilogram of NOK 13.80 (USD 1.29, EUR 1.19) – down from NOK 25.10 (USD 2.35, EUR 2.17) in Q1 2023.
Grieg's harvest volume from its Finnmark region for the quarter ended at 5,663 MT, compared with 7,856 MT in Q1 2023, while Rogaland’s harvest was up from 7,502 MT in Q1 2023 to 9,426 MT in Q1 2024. In Canada, its British Columbia farms harvested 666 MT, and Newfoundland’s harvest totaled 5,320 MT. Grieg’s total expected harvest volume for the second quarter is 17,100 MT, comprising 10,000 MT from BC, 3,600 MT from Rogaland, and 3,500 MT from Finnmark.
There will be no harvests in Newfoundland in Q2 2024, but they will resume in the third quarter, Grieg confirmed.
For the full-year 2024, Grieg has provided a harvest estimate of 81,000 MT. Of this, Rogaland is projected to supply 28,000 MT, Finnmark 27,000 MT, BC 15,000 MT, and NL 11,000 MT.
In the longer term, Grieg's business strategy calls for an increase in its salmon harvest volume to somewhere between 120,000 MT and 135,000 MT through the improved utilization of current operations and the further development of the Newfoundland operation.
