Grieg Seafood Group (GSF) achieved operational earnings before interest and taxes (EBIT) of NOK 426.3 million (USD 51 million, EUR 44 million) before fair value adjustment of biomass in the second-quarter of this year, up from NOK 392.3 million (USD 47 million, EUR 40.5 million) in the corresponding period of 2017.
The Norway-headquartered salmonid producer’s operating income for the three months increased by 14 percent year-on-year to more than NOK 2.3 billion (USD 275.4 million, EUR 237.4 million).
Growth was underpinned by a new record second-quarter salmon harvest of 22,568 metric tons (MT), as well as high prices and strong demand. However, its EBIT per kg amounted to NOK 18.89 (USD 2.26, EUR 1.95), down from NOK 21.20 (USD 2.54, EUR 2.19) in Q2 2017.
In its Q2 results statement, GSF said that the average spot price rose by NOK 0.98 (USD 0.12, EUR 0.10) per kg to NOK 68.81 (USD 8.24, EUR 7.10), but that its realized price was down by NOK 3.21 (USD 0.38, EUR 0.33) per kg – partly due to a combination of a high proportion of harvesting towards the end of the quarter when prices were lower, and partly because of a lower price achievement for pancreas disease (PD)-affected fish in the Rogaland region.
The harvest volume for Rogaland was down 1,345 MT to 6,409 MT in the last quarter.
For the first six months of this year, GSF’s operating income totaled NOK 3.8 billion (USD 454.7 million, EUR 392.2 million), up from NOK 3.5 billion (USD 418.8 million, EUR 361.3 million) in H1 2017. The first-half harvest volume was 34,001 MT, up from 27,056 MT in the corresponding period of last year.
Grieg’s harvest volume in Q3 2018 is expected to be 17,100 MT. For 2018 as a whole, the harvest is expected to be 75,000 MT, which is 20 percent more than in 2017, but 5,000 MT less than previously forecast, with the revision attributed to the PD challenge in Rogaland as well as a harmful algae bloom (HAB) in British Columbia, Canada, which resulted in 125,000 fish mortalities, equal to 1,000 MT.
“We have an ambition to reach an annual harvest volume of 100,000 MT by 2020. This increase in production will be obtained by better utilizing our existing licenses, investing in new capacity and stocking larger smolt,” said Andreas Kvame, CEO of Grieg. “We also have an ambition to achieve production cost at or below industry average. Reduced production time in sea, optimal feeding, preventive sea lice measures and digital tools are important initiatives to reach our goals, while at the same time achieving long-term sustainable production."
