Marine Harvest Chairman Ole-Eirik Lerøy sold 1.6 million shares of his company’s stock on 31 August, valued at NOK 179.74 (USD 22.05, EUR 18.75) per share.
The deal brought in approximately NOK 287.6 million (USD 35.3 million, EUR 30 million) for Lerøy, though he had to spend approximately NOK 139.3 million (USD 17 million, EUR 14.5 million) to exercise his options on one million shares of Marine Harvest stock sold by John Fredriksen through his trust Geveran Trading Co. The transaction was the result of a deal made in 2016 between Geveran and Lerøy’s own holding company, Framar AS.
“Now I have been in the company for almost 10 years and it has been a wonderful trip,” Lerøy told the Norwegian newspaper Dagens Næringsliv. “I’m happy with the purchase, I am happy with the sale, and I am pleased with the development of the company.”
Following the trades, both Geveran and Lerøy remain two of Marine Harvest’s biggest shareholders. Geveran owns more than 78 million shares in Marine Harvest – more than 16 percent of the company’s issued share capital – while Framar owns 1.5 million shares, the equivalent of 0.31 percent of Marine Harvest.
After the transaction, was completed Lerøy emphasized that Marine Harvest still represents his biggest investment.
“First and foremost, I sold shares to finance the option agreement with Geveran. The deal is approaching the deadline, and in order to realize the sale, I had to sell,” Lerøy said.
If Marine Harvest’s market value continues to grow the way it has over the past year, Lerøy will have reason to hold on to the remainder of his shares. At the beginning of 2018, Marine Harvest’s stock was trading at NOK 137.86 (USD 16.88, EUR 14.36), meaning its price has appreciated in value by more than 40 percent. Over the past five years, it’s up even further, rising from NOK 96.46 (USD 11.69, EUR 9.94) in January 2014.
In terms of production, the Bergen, Norway-based company continues to produce solid results. It reported operational earnings before interest and taxes (EBIT) of approximately EUR 175 million (USD 204.8 million) in the second quarter of this year and in 2017, it set company records for EBIT in its second quarter and third quarters.
The company continues to make moves to clear its path to even more growth in the future.
In July 2018, it completed its acquisition of Canadian salmon farming operation Northern Harvest for CAD 315 million (USD 251 million, EUR 209 million).
It also began an expansion of its operations in Medley, Florida, in an industrial park near Miami’s international airport, including a new construction project that will double the size of its processing facility to 100,000 square feet. The new facility will add 200 jobs and serve as a salmon processing and repackaging facility serving regional distribution to clients including Whole Foods, Publix, and Walmart, among other major retailers, according to a press release.
Marine Harvest is also expanding the Belfast, Maine facilities of its salmon smoking subsidiary, Ducktrap River of Maine. The USD 5 million (EUR 4.3 million) expansion will increase Ducktrap's capacity by 75 percent, according to Mainebiz.
Marine Harvest also recently announced the dissolution of a five-year-old joint venture agreement with Spanish seafood processor Angulas Aguinaga, which saw the two firms jointly producing a range of frozen salmon products for the domestic market.
"After five years of collaboration, working and learning together, Angulas Aguinaga and Marine Harvest have decided to finalize their collaboration agreement by which they produced and commercialized products related to salmon in Spain and Portugal," Angulas Aguinada said in a press release.
The companies agreed to part ways in April 2018 and both will continue to produce products for the Iberian market, but separately, according to the release.
“[Both companies] are grateful for the work done in recent years and show their willingness to continue collaborating in the future,” Angulas Aguinada said in its release.
One of the biggest challenges to the company’s future growth appears to be biological problems – primarily, sea lice. Last year, Marine Harvest CEO Alf-Helge Aarskog called sea lice the company’s “number one challenge.”
“As such, [they] will continue to be our top R&D priority for the foreseeable future,” he told the BBC. "Uncontrolled, sea lice impact fish welfare, survival and growth. However, it has become apparent that sea lice numbers can be brought under control through increased use of non-medicinal treatment methods.”
One of the company’s most promising technological advances in its fight against sea lice is “The Egg,” a new conceptual design for a salmon farming pen that received the go-ahead from the Norwegian government in June 2017.
Marine Harvest is pleased that the authority shares the view that ‘the Egg’ represents a potential new production solution within salmon farming, which may contribute to further develop the salmon farming industry,” the company said in a statement.
“If successful, this technology could potentially solve a number of challenges the industry faces today and also reduce the costs related to these,” Ola Helge Hjetland, a spokesperson for Marine Harvest, told SeafoodSource at the time.
Photo courtesy of Butters Construction
