Salmon prices bite into Lerøy’s 4Q results

“Substantially” lower salmon prices took a bite out of Lerøy Seafood Group’s fourth-quarter results. But the Oslo-listed company still managed to post an increase in turnover and an operating profit last year.

On Thursday, Lerøy reported its fourth-quarter results, including a turnover of NOK 2.25 billion, down from NOK 2.57 billion in the corresponding quarter of 2010, and an operating profit (before fair value adjustment of biomass) of NOK 120 million, down from NOK 539.2 million.

However, in all of 2011, Lerøy posted a turnover of NOK 9.18 billion, up 3.3 percent from 2010, and an operating profit (before fair value adjustment of biomass) of NOK 1.21 billion, compared with NOK 1.59 billion in 2010.

The company boosted its salmon production from 116,800 metric tons (gutted weight) in 2010 to 136,700 metric tons in 2011, a 17 percent increase, which was in line with its plan.

Looking ahead, Lerøy said it expects growth in the global Atlantic salmon supply to be higher in 2012 when compared with the previous two years. “Development in demand is good, and lower prices provide grounds for optimism as to continued positive development in demand,” said the company. “Good demand together with expectations for improved productivity in the group’s production facilities, including improved biology, provides justification for the board’s positive attitude toward the group’s development.”

Lerøy also announced on Wednesday that it has inked an agreement with SalMar ASA in which Lerøy will slaughter and process a “high” volume of fish at the Innovamar plant in Frøya, while SalMar will slaughter its total production of fish at Lerøy’s plant Skjervøy island. “Lerøy is extremely satisfied with this new alliance, which will allow both parties to realize major gains in efficiency and capital rationalization,” said the company. “The agreement is an extension of a cooperation with SalMar.”


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