Grieg Seafood ASA: Q2 2024 results
Source: GlobeNewswireHighlights
- Harvest volume of 15,272 tonnes (22,645 tonnes).
- Operational EBIT in the quarter of NOK -35 million (NOK 547 million), with operational EBIT/kg of NOK -2.3 (24.2).
- BC results significantly impacted by biological event, also adversely affecting Q3 with an expected negative Operational EBIT in BC in the range of NOK 230 and 250 million.
- Spiro impacted generation in Finnmark has been fully harvested in July 2024, after the balance sheet date.
- Underlying production in Norway has been good towards the end of the quarter and into Q3.
- Construction of post-smolt facilities in Rogaland, Finnmark and Newfoundland, and VAP facility at Gardermoen, are ongoing. Biomass investments on plan.
- Uncertainty remains awaiting government decision on transition plan for Atlantic salmon aquaculture in BC.
- Process to identify long-term partners to take part in the development of Canadian operations is ongoing – expected conclusion during autumn 2024.
- 97% of the harvested volume in the quarter ASC certified.
- Expect to harvest 16,700 tonnes in Q3 2024, targeting harvest volume of 78,500 tonnes for the full year 2024.
Financial results
Operational EBIT for Grieg Seafood was negative NOK 35 million in the second quarter of 2024, compared to NOK 547 million in the corresponding period in 2023. Harvest volume was 15,272 tonnes during the period (22,645), which gives an operational EBIT per kg of NOK -2.3 (24.2).
In Rogaland, harvest volume for the quarter was 2,771 tonnes. This is significantly below the 11,536 tonnes harvested in the second quarter 2023, but according to plan as building of biomass has been a priority for the Rogaland operation during the quarter. Underlying operational performance has been good with the post-smolt strategy contributing to good biology and fish welfare. Operating EBIT/kg ended at NOK 19.9 (36.7).
In Finnmark, harvest volume for the quarter ended at 3,886 tonnes (5,573). Results were impacted by low average harvest weight which carried high costs from prior period’s challenges caused by Spiro and string jellyfish. Operational EBIT/kg ended at NOK -3.3 (25.4). Seawater production improved during the quarter and costs are expected to decrease.
Operations in British Columbia were severely impacted by events of low dissolved oxygen (DO) during the quarter, causing increased mortality rates, loss of feeding days and reduced growth. Operational EBIT/kg ended at NOK -4.9 (-2.5) on a harvest volume of 8,615 tonnes (5,537).
According to previously communicated production plans, the Newfoundland operations had no harvest during the second quarter. However, seawater production was good, with solid growth and high survival rates.
Commenting on the quarter, Andreas Kvame, CEO of Grieg Seafood ASA said:
“The second quarter of 2024 was a challenging period for Grieg Seafood and our performance and results reflect continued biological challenges.
In Canada, our operations in British Columbia were impacted by events of extraordinary low dissolved oxygen levels, resulting in significant reduced survival rates. In addition, uncertainty remains in BC, awaiting the Government decision on transition plan for Atlantic salmon aquaculture. In the meantime, Grieg Seafood has suspended all strategic investments in the region.
In Finnmark, harvest volumes remained impacted by the Spiro parasite, combined with biological challenges caused by string jellyfish. However, by the end of July, harvesting of fish previously exposed to Spiro was completed. Furthermore, combined with measures taken to improve fish-health overall, biological performance in the region is improving and costs are expected to decrease. Hence, I believe we are heading towards better times in the Finnmark region.
Earnings and farming cost in Rogaland were impacted by planned low harvest volumes. However, the underlying performance was good. Rogaland was the first region to implement our post-smolt strategy. Since implementation, we have proved that the strategy contributes to good biology and high average weight, underscoring our strong conviction that this is a key element to securing good fish health and welfare.
Looking forward, investments in operational assets and biomass are developing according to plan, I am also pleased to say the construction of our new post-smolt facilities in Rogaland, Finnmark and Newfoundland, in addition to the VAP facility at Gardermoen, are progressing well.”
Operational and financial update for Q3 2024
Grieg Seafood BC has experienced challenging environmental conditions so far in Q3 which are still ongoing. Low DO levels in Q2 2024 and following algae bloom have increased mortality, impacting growth into Q3. Combined with a market under pressure in North America, and low average harvest weight, a negative Operational EBIT in Q3 (harvest volume of 3 200 tonnes) in the range of NOK 230-250 million is expected for BC.
Outlook
The global supply of Atlantic salmon in 2024 is expected to slightly increase compared to 2023. With expectations of limited supply growth in 2024, combined with an outlook for continuing strong demand fueled by an increased focus on healthy food and sustainably produced proteins, we expect a sustained robust market.
Estimated contract share for the Norwegian operations is 9% for Q3 2024 and 8% for the full year 2024.
In the third quarter of 2024, expected harvest volume is 16,700 tonnes, distributed as follows:
– Rogaland: 8,500 tonnes
– Finnmark: 5,000 tonnes
– BC: 3,200 tonnes
– NL: 0 tonnes
The company guides for a harvest volume of 78,500 tonnes in 2024, distributed as follows:
– Rogaland: 28,000 tonnes
– Finnmark: 27,000 tonnes
– BC: 12,500 tonnes
– NL: 11,000 tonnes
Results presentation
Chief Executive Officer (CEO), Andreas Kvame and Chief Financial Officer (CFO) Atle Harald Sandtorv will present the results live at the “Vestland på Børs 2024” event at Scandic Flesland Airport Hotel, Bergen today at 10:45 a.m. CEST.
A live webcast from the presentation can be accessed at https://investor.griegseafood.com/reports-&-presentations#quarterly or with the following link:
https://channel.royalcast.com/landingpage/hegnarmedia/20240821_22/.
An English transcript of the presentation will be made available at https://investor.griegseafood.com/
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. Our farms are in Finnmark and Rogaland in Norway, and British Columbia as well as Newfoundland in Canada. Our headquarter is located in Bergen, Norway. Grieg Seafood ASA was listed at the Oslo Stock Exchange in June 2007.
Sustainable farming practices are the foundation of Grieg Seafood's operations. The lowest possible environmental impact and the best possible fish welfare is both an ethical responsibility and drive economic profitability.
To learn more, please visit www.griegseafood.com
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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