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2019-05-15 06:00 CEST
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Grieg Seafood ASA: Q1 2019 results - Continued operational improvements and strong growth

Highlights

  • Harvest volume of 14 800 tonnes, 30% increase compared to Q1 2018
  • EBIT before fair value adjustments of NOK 267 million (NOK 162 million)
  • EBIT/kg NOK 18.07, up 27% from Q1 2018
  • Strong biological performance in Norway and BC
  • Earnings driven by overall high prices and cost reductions in Norway
  • Continued high cost in Shetland, driven by enduring biological challenges
  • Expect harvest volume of 82 000 tonnes in 2019, 10% growth from 2018

 

Financial results

The Grieg Seafood Group harvested 14 801 tonnes GWT in Q1 2019, compared to 11 443 tonnes in Q1 2018.

The average realized price was up in Q1 2019 compared to Q1 2018, mainly driven by higher average market price. Total revenues during the quarter amounted to NOK 1 650 million, an increase of 9% compared to the same period last year.

Farming cost (total cost related to fish harvested this quarter) improved compared to the same quarter last year, mainly related to economies of scale from higher harvest volume and improved production in Norway. 

The Group's EBIT before fair value adjustment of biological assets was NOK 267 million during the quarter (162). The corresponding EBIT per kg amounted to NOK 18.07 for the period (14.18). EBIT from the four regions includes value creation from the respective sales activities of the Group's jointly-owned sales company, Ocean Quality.

Commenting on the Group's performance, CEO Andreas Kvame, said:

"During the first quarter Grieg Seafood experienced strong growth and continued biological improvements, particularly in Finnmark and Rogaland. Our strong performance is a result of our skilled employees' dedication to our strategic focus areas - large smolt, digitalization, biosecurity and fish welfare and operational expansion.

We are still in the early stages in executing on our priorities and we expect continued growth and operational improvements going forward. We remain confident in our 2020 target of 100 000 tonnes harvest with cost at or below industry average, and with our five pillars for sustainability, we remain committed to our ambition for sustainable salmon farming and long-term value creation for all our stakeholders.

We are proud to have climbed from 12th place to 8th place on the SHE Index, which scores companies on their efforts to improve gender balance in management. Our objective is to achieve sustainable growth by combining talented people, knowledge about nature and new technology."

Strategic priorities

Improving sustainability is key to increasing our profits, and by combining skilled and motivated people with new technology and by increasingly farming salmon on nature's terms, we will ensure sustainable, cost-efficient growth. Short term, our goal is to reach an annual harvest volume of
100 000 tonnes in 2020, targeting group production cost at NOK 37.90 per kg. Combined with continues strong focus on our strategic priorities, this will form the basis for sustainable growth also going forward, generating value for all our stakeholders.

Through the digitalization strategy "GSF Precision Farming," Grieg Seafood intends to take a leading role in utilizing new technology, big data and artificial intelligence to improve operational efficiency through reduced environmental impact, increased fish welfare and improved growth.

With a strict focus on biosecurity and fish welfare, Grieg Seafood aims to achieve strong biological performance through the implementation of a broad range of technological and operational initiatives, including large smolt, GSF Precision Farming and other preventive operational measures aimed at combating sea lice and algae. The group targets an average survival rate in seawater above 93%.

Outlook

The global supply of Atlantic Salmon for 2019 is expected to increase by approximately 4-7% compared to 2018, mainly due to increased harvest volume in Norway, UK and Chile. With a growing demand and limited possibilities for increase in harvest volumes, prices are expected to remain high.

The Group's total share of fixed price contracts in Norway in Q1 2019 was 17%. The share of fixed price contracts for Norway and the UK is estimated to be 20% for the year.

During Q1 2019, 3.7 million smolt were transferred to sea, with an average weight of 188 grams. Approximately 26-28 million smolt is planned stocked in 2019, with an average weight around 190 grams.

Grieg Seafood expects to harvest approximately 82 000 tonnes in 2019. The expected harvest volume for Q2 2019 is 21 000 tonnes, comprised of:

  • Rogaland: 7 700 tonnes
  • Finnmark: 5 500 tonnes
  • Shetland: 3 100 tonnes
  • BC: 4 700 tonnes

Results presentation

CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results later today at 08:00 CEST at Hotel Continental, Stortingsgaten 24/26, Oslo.

The presentation and subsequent Q&A will be held in Norwegian and can be followed live via webcast at www.griegseafood.com or at the following link; https://webtv.hegnar.no/presentation.php?webcastId=97815832

It will be possible to ask questions online.

An English transcript of the presentation will be made available at www.griegseafood.com within a few days after the presentation.

For further enquiries, please contact:

Andreas Kvame, CEO

Cell phone: +47 907 71 441

Atle Harald Sandtorv, CFO

Cell phone +47 908 45 252

 

About Grieg Seafood

Grieg Seafood ASA is one of the world's leading salmon farmers, specializing in Atlantic salmon. The Group has an annual production target of 100 000 tonnes gutted weight in 2020. 

Our farming facilities are in Finnmark and Rogaland in Norway, British Columbia in Canada and Shetland in the UK. 804 people are employed by the Group. Grieg Seafood ASA was listed at the Oslo Stock Exchange in June 2007. Our headquarters are situated in Bergen, Norway. The business development of Grieg Seafood ASA focuses on profitable growth, sustainable use of resources and being the preferred supplier to selected customers.

To learn more, visit www.griegseafood.com

 

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

HUG#2244397