Grieg Seafood ASA: Q2 2022

Highlights

  • Operating EBIT of NOK 986 million, with operating EBIT/kg of NOK 41.6, driven by exceptionally high prices and good biological performance
  • Accelerated harvest benefit from high market prices – good coordination between agriculture and sales
  • First fish at sea in Newfoundland, with high survival rate
  • Seawater production good in all regions with stable survival
  • Group farming costs of NOK 48.6 per kg (NOK 50.7 in the second quarter of 2021). NOK 42.7 per kg for Norwegian operations, despite inflationary pressures
  • Expect a harvest of 21,400 tons in Q3 2022 and 87,000 tons for the full year 2022

Financial results

Operating EBIT for Grieg Seafood was NOK 986 million in the second quarter, up from NOK 44 million in the same period last year. The harvest volume was 23,700 tons in the period (17,800), giving an operating EBIT per kg of NOK 41.6 (2.4).

Continuing the positive trend in the first quarter, the second quarter of 2022 also became historic. Due to the strongest market the industry has seen, coupled with solid production, I am proud to present Grieg Seafood’s best single quarter result ever. I would like to sincerely thank all my dedicated and hardworking colleagues in both agriculture and sales for their efforts and achievements during the quarter. In line with the strategy of our integrated sales organization, we have successfully accelerated part of the harvest to take advantage of strong prices in the market.” says CEO Andreas Kvame in Grieg Seafood.

The Norwegian agricultural business delivered record results during the quarter, driven by high prices and good organic performance. The results in both Rogaland and Finnmark were positively influenced by strong price realization due to high average harvest weights and a positive cost development.

Results in British Columbia were solid, driven by good premium price development on VAP products, alongside stable costs from harvesting sites with good biological performance.

In Newfoundland, seaborne fish are doing well, with a high survival rate and no problems with sea lice. Currently, two million molts have been transferred to the sea, with harvest starting at the end of 2023.

Outlook

The global Atlantic salmon harvest in 2022 is expected to decline by 1%, with volumes declining in all major regions. In the first half of 2022, the global harvest was 4% lower than in the first half of 2021. As a result, the harvest volume for the second half of 2022 is expected to increase by almost 1% compared to the corresponding period in 2021.

With limited supply growth in the second half of 2022, Grieg Seafood expects good market conditions for the future. However, current inflation reducing household purchasing power may impact demand from both the hospitality and retail segments.

In recent years, Grieg Seafood has been able to reduce agricultural costs through operational improvement initiatives. However, general cost inflation, and in particular higher feed prices, is expected to gradually affect agricultural costs in the future.

Grieg Seafood’s cost ambition remains – to be the cost leader in all regions where the company operates. To achieve this, the company is executing its strategic priorities – post smolt, preventive farming practices, digitalization, integrated operations and leveraging existing capacity.

Grieg Seafood generally aims for an annual contract share of 20-50%. The estimated contract share for the Norwegian operations in the third quarter of 2022 is 37% and 22% for the full year 2022.

In the third quarter of 2022, the expected harvest volume is 21,400 tons, divided as follows:

  • Rogaland: 7,100 tons
  • Finnmark: 7,100 tons
  • BC: 7,200 tons

The company now expects a harvest volume of 87,000 tons in 2022, a decrease from the previously managed level of 90,000 tons. Estimated harvest volume in Finnmark has been reduced by 2,000 tons to 36,000 tons due to an accelerated harvest to take advantage of the strong market and somewhat reduced growth in sea during the quarter due to lower temperatures. The estimated harvest volume in BC has been reduced by 1,000 tons to 21,000 tons due to the accelerated harvesting of fish due to the risk of early ripening. Of the total harvest volumes for 2022, Grieg Seafood expects to sell about 5-10% as VAP products.

Results presentation
CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results live at Hotel Continental today at 9:00 am CEST.

The presentation can be accessed at https://investor.griegseafood.com/reports-&-presentations#quarterly, or via the following link: https://channel.royalcast.com/landingpage/hegnarmedia/20220823_2/

The presentations and subsequent Q&A will be held in Norwegian. An English transcript of the presentations will be made available at https://investor.griegseafood.com/reports-&-presentations#quarterly.

For further questions, please contact:
Andreas Kvame, CEO
Mobile phone: +47 907 71 441

Atle Harald Sandtorv, CFO
Mobile phone +47 908 45 252

About Grieg Seafood
Grieg Seafood ASA is one of the world’s leading salmon farmers. Our farms are located in Finnmark and Rogaland in Norway, and in British Columbia and Newfoundland in Canada. Our head office is located in Bergen, Norway. Grieg Seafood ASA was listed on the Oslo Stock Exchange in June 2007. More than 750 people work in the company in our regions.

Sustainable farming practices are the foundation of Grieg Seafood’s business. The lowest possible environmental impact and the best possible fish welfare is both an ethical responsibility and economic profitability. By 2026, we aim for global growth, cost improvements and moving from a pure salmon supplier to an innovation partner for selected customers.

For more information, visit www.griegseafood.com

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

  • GSF Quarterly Report Q2 2022

  • GSF Q2 2022 Quarterly Presentation

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