Norway’s Grieg Seafood saw higher harvested volume in 2Q 2014 and higher earnings for 1H 2014 compared to 2013, but lower prices put a damper on 2Q profits.
The report showed earnings before interest and taxes (EBIT) before fair value adjustment of biomass was up in the first half of 2014, totaling NOK 263.9 million (USD 42.9 million, EUR 32.2 million) compared to NOK 184.8 million (USD 30 million, EUR 22.6 million) in 2013. Harvest volumes were up too, totaling 18,950 metric tons (MT) in 2Q compared to 14,397 MT in 2013, an increase of 32 percent for the group.
Despite these increases, EBIT was down for 2Q, totaling NOK 123.8 million (USD 20.1 million, EUR 15.1 million) compared to NOK 133.7 million (USD 21.8 million, EUR 16.3 million) recorded for the same period in 2013, with similar decreases in net profits. The company blamed “lower realized prices” for the decrease, particularly in Scotland and Canada, coupled with late harvests in 2Q.
The company’s outlook included predictions based on Russia’s new ban on imports from the west. Grieg predicted that in the short term, a glut in salmon caused by the trade ban will adversely affect prices, but other countries that can still export to Russia will compensate by shifting product, creating new holes in supply which can then be filled. The company didn’t’ go into detail on this prediction, but concluded that in the end, the shifting of product “is likely to gradually bring the global salmon market back into balance.” The company also predicted “only a marginal increase in global supply in 2015.”
