Third-quarter sales, harvest soar for Grieg Seafood as Shetland sale nears completion

Published on
November 3, 2021
Grieg Seafood Group posted higher operational earnings before interest and taxes (EBIT) of NOK 149 million (USD 17.5 million, EUR 15.1 million) in Q3.

Bergen, Norway-headquartered salmonid producer Grieg Seafood Group posted higher operational earnings before interest and taxes (EBIT) of NOK 149 million (USD 17.5 million, EUR 15.1 million) before fair value adjustment of biomass for the third quarter of this year, reversing a loss of NOK 14 million (USD 1.6 million, EUR 1.4 million) it delivered in the corresponding period of 2020.

The turnaround was driven by high prices from its British Columbia, Canada, operations and declining cost levels, the company said. It also benefited from underlying operational improvements, with increased fish survival in all of its production regions.

Not including volumes from its Shetland operations, which are being sold, some 20,479 metric tons (MT) of gutted weight salmon was harvested in the quarter, which was 42 percent more than in the corresponding period of last year. Regionally, Finnmark provided the most fish with 9,908 MT, followed by Rogaland (6,282 MT), and British Columbia (4,289 MT).

The company estimates that it supplied 3.6 percent of the global volume of Atlantic salmon harvested in Q3 2021.

Sales revenues from continuing operations exceeded NOK 1.3 billion (USD 152.8 million, EUR 131.8 million), an increase of 43 percent compared to Q3 2020, while the price achievement was NOK 58.40 (USD 6.86, EUR 5.92) per kilogram against NOK 52.90 (USD 6.22, EUR 5.36) in Q3 2020.

Grieg CEO Andreas Kvame said it was one of the company’s best third quarters in its history.

“Biology has continued to improve and stabilize, with increased survival across the regions compared to last year. The market was surprisingly strong, considering the large volumes harvested in the industry during the quarter, which would normally cause lower prices,” he said. “Operationally, British Columbia was again a highlight during the quarter, with stable production and high average harvest weights. We continued the positive trend of reduced impact by harmful algae blooms. We experienced the full advantage of the region’s close proximity to a strong U.S. market, where we achieved high prices.”

Kvame said Grieg’s Shetland farms continued to deliver a profit, and that the sale of those operations is expected to be approved by U.K. authorities during the fourth quarter. Grieg Seafood Shetland harvested 4,029 MT in the last quarter, a decrease of 40 percent compared to Q3 2020. For the year to date, the harvest volume in Shetland was 11 206 MT, down from 12,602 MT harvested in the first nine months of 2020.

“[The sale] will allow us to concentrate focus, resources, and investments to our production regions with the most potential for profitable growth – Norway and Canada,” he said.

Also in Q3, Grieg established a value-added product (VAP) sales department, which it said will be a key contributor to increase its VAP product portfolio from its Norwegian and Canadian salmon. As a first step, it signed a letter of intent for cooperation with Isfjord Norway AS for value-added processing capacity in Norway. Through the agreement, Grieg Seafood will process a part of its harvest volumes at Isfjord Norway and sell finished products through its in-house sales organization. This capacity will also contribute to better price achievement should fish be downgraded, Grieg said.

Kvame said Grieg is confident there will be a strong recovery in the foodservice sectors as society “gradually moves back to pre-pandemic levels.”

With global supply growth muted for the remainder of 2021 and the start of 2022 due to significant decrease in supply of volumes from Chile and modest supply growth in Europe, the outlook for the strong market prices continuing is good, Kvame said.

For Q4 2021, Grieg expects a total harvest volume of 25,100 MT, with Rogaland producing 7,100 MT, Finnmark 13,400 MT, and B.C. 4,600 MT. However, due to pancreas disease (PD) in Rogaland and optimization of capacity utilization in addition to skewing of volume to 2022 in Finnmark, its estimated harvest volume for the full-year 2021 has been reduced by 3,000 MT to 77,000 MT. Its current estimated harvest volume for 2022 is 90,000 MT.

Photo courtesy of Grieg Seafood

Contributing Editor reporting from London, UK

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