Grieg posts weak 3Q

Plunging prices in the United States caused by a bumper-crop of Chilean production are partly to blame for a rough third quarter for Norway-based Grieg Seafood, which posted an “unsatisfactory result” in its third quarter report.

Once again, third-quarter earnings were in the negative, as they were in 2011, but 2012’s result was worse, at NOK -69.4 million (USD -12.1 million, EUR -9.4 million) compared to NOK -30.7 million (USD -5.4 million, EUR -4.2 million) in 2011. The company noted that the harvest volume of 15,233 metric tons (MT) was close to numbers from Q3 2011, however.

“The decline in profits was due to the extraordinary steep decline in prices in the USA and biomass write-downs in British Columbia and UK,” the company wrote in its report.

The price decreases were due to a “strong Chilean production increase,” but noted that the rate of increase of supply is falling, from above 30 percent in the first half 2012 to 18.5 percent in the third quarter.

“The increase in supply in the next 12 months will be considerably lower than in the last year, especially in Europe, and this is expected to improve market equilibrium and margins at production level,” the report noted.

In Europe, Grieg fared better. Prices dropped there, too, but only seasonally, and costs were down in Norway compared to the third quarter 2011.

Looking forward, Grieg estimates a total 2012 harvest volume of 72,500 MT, which would be an improvement over the 60,082 MT harvested in 2011.


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