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GSF Q1 2017 – report and presentation

GRIEG SEAFOOD ASA: Q1 2017 – planned low harvest volume in Q1 in order to build biomass

Highlights – First Quarter 2017

  • EBIT: MNOK 131.5 (EBIT/kg: NOK 15).
  • Market remains strong.
  • Low harvest volume (8 552 tons) in three regions, as planned in order to boost sea production, increases costs per kilo.
  • Stable production in all regions.
  • EBIT/kg in Rogaland: NOK 28.0.
    – Normal harvest volume and stable costs.
  • EBIT/kg in Finnmark: NOK 9.4.
    – ILA location laid fallow, costs included in Q4.
  • EBIT/kg in BC: NOK 14.1.
    – Harvesting from weak generation previously affected by algae challenges.
  • EBIT/kg in Shetland: NOK -11.2.
    – Harvesting from weak locations to be laid fallow under new production plan.
  • Expected harvest volume of 70 000 tons in 2017 is maintained.
    – Smolt input as planned and reflects an increase (in both number and size) compared with Q1 2016.

First Quarter Results 2017

EBIT for the Group before fair value adjustment of biomass was MNOK 131 in Q1 2017, against MNOK 214 in 2016. The harvest volume in Q1 2017 was 8 552 tons, against 13 635 tons in the corresponding period last year, reflecting a reduction of 37%. The low harvest volume was planned in order to maximise the level of biomass in the sea in order to achieve higher growth.

EBIT from the four regions includes value creation from sales/Ocean Quality (OQ), while OQ’s value creation relating to fish from Bremnes (which owns 40% of OQ) appears in the item designated IKE in the above table.

The pre-tax accounts for Q1 show a loss of MNOK 69 against a profit of MNOK 252 in last year’s first quarter. The negative result must be seen in the light of the fair value adjustment of biomass to take account of the decline in salmon prices from Q4 2016 to Q1 2017.

Group operating income in Q1 2017 totalled MNOK 1 422, reflecting a 12% change compared with the same period in 2016. The increase was due to higher prices and some increase in volume from Bremnes (external fish) compared with Q1 2016.

The results for Q1 2017 reflect a reduction in the harvest volume in all regions apart from Rogaland. This has meant that fixed costs are divided over a smaller volume, thereby increasing costs per kilo.

Following a decline in salmon prices in the first weeks of 2017 the market has been relatively stable. GSF can report that demand for its salmon is good at the present price level.

In Norway, the proportion of salmon sold on fixed price contracts stood at 55% in Q1 2017 and this proportion is expected to be around 17% in Q2 2017. The decline in the proportion of fixed price contracts is partly explained by an increase in the harvest volume in Q2. The fixed price proportion for 2017 as a whole stands at 21%, and some increase in this figure is planned.

Measures to boost production and reduce costs

A stated goal is to reduce GSF’s cost level to the industry average, or lower. The company will also be aiming to increase production by 10% annually in the period 2018-2020.
GSF has an ongoing focus on improving operating efficiency, and this involves both increasing production per plant and per licence, as well as reducing costs per kilo.  One of the key steps being taken is to set out bigger smolt which will make it possible to shorten the production time in the sea. An increase in the number of smolt is also decisive to achieve growth and lower costs.

The company this therefore planning to increase the amount of smolt set out in 2017 compared with 2016. So far this year the steps taken are in accordance with the plan.

There is also a focus on improving the survival rate and wellbeing of the fish.

Outlook

In a global perspective, there are expectations of limited supply-side growth in the salmon market. There is strong underlying demand for salmon and good prices are therefore expected in 2017.

The harvest volume in Q2 2017 is expected to be 18 000 tons. For 2017 as a whole the figure is expected to be 70 000 tons, 8% up on 2016.

 

For further information, please contact:

– CEO Andreas Kvame (cell phone: +47 907 71 441)
– CFO Atle Harald Sandtorv (cell phone: +47 908 45 252)

 

GSF Q1 2017 report
GSF Q1 2017 presentation

New report on sustainability in Grieg Seafood

Grieg Seafood keeps up the tradition from 2013 to publish the Group’s adopted performance indicators on sustainability efforts.

Grieg Seafood has adopted an ambitious strategy to enforce sustainability into all aspects of the Group’s business, as assumed in the Sustainability Report. The company’s goal is to be a strong sustainability player in our industry, based on measured performance communicated to the market and the public on an ongoing annual basis.

Cooperation with national and regional authorities, local communities, interest groups, shareholders, suppliers and customers – and the relationship with own employees – is subject to consistent assessment in the Sustainability Report. In addition to specific KPIs, the Group offers a qualitative assessment of a number of aspects of sustainability.

 


 

 

 

 

 

 

 

 

Sustainability Report indicators

Lice control: Prevalence of sea lice in all regions, monthly throughout the year. Measurement of medical and mechanical procedures.

Food safety and quality: Measures traces of unwanted drugs, toxins or metals in farmed fish. No findings in 2016.

Escape control: Measurement of escapes and procedures for traceability shows three cases of escape in 2016, one in Finnmark and two on Shetland.

Fish health: Reporting from the corporate fish health program, showing mortality below 7% in Finnmark, close to the target in Rogaland, improvement in British Columbia, weaker results in Shetland.

Openness and stakeholder dialogue: Reporting communications based on openness, respect and ambition – towards authorities, owners, interest groups, investors, customers, suppliers and employees.

Other indicators: Sustainable feed – interaction with wildlife – employee health, safety and working environment – anti-corruption and integrity – ripple effects on local communities

 

Sustainability contact in Grieg Seafood ASA:

GSF Director Feed and Nutrition, Tor Eirik Homme, cell. +47 952 43 050

 

Image disclosure:

Image from front page of report, freely used if credited “Photo: Hung Ngo”.

 

 

 

 

 

GSF – Annual Report 2016

A real effort that paid off

Grieg Seafood ASA has today published the Annual Report, as adopted by the Board of Directors.

The Annual Report includes the Board of Directors Report, the Principles of Corporate Governance, together with the Group and Parent Financial Accounts.


 

 

 

 

RAISING THE BAR: The Global Salmon Initiative (GSI) releases third annual sustainability report

Driving industry-wide improvements in sustainability through greater transparency and cooperation, the GSI members continue to raise the bar in industry performance by publishing the third annual sustainability report, which highlights that one-quarter of all GSI farms are now ASC certified

 

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Brussels, Belgium – April 26, 2017, 09:00 CET: The 2016 Sustainability Report published today by the Global Salmon Initiative (GSI) features 4 years’ worth of data from all 12 GSI salmon farming member companies. Using the Aquaculture Stewardship Council (ASC) Salmon Standard as a framework, the report documents the GSI members’ environmental and social performance across 14 key sustainability indicators, and highlights improvements in responsible business practices. Continuing to raise the bar in industry transparency, this year’s report is also the first from the GSI leadership group to include data verified by independent auditors, providing additional credibility and reassurance for stakeholders.

Highlights from the 2016 Sustainability Report include:

  • Nearly one-quarter of all GSI farms now ASC certified – a 60% increase from 2015
  • Overall preferential environmental performance of farmed salmon when compared to other livestock sectors on indicators such as carbon footprint, energy retention and protein retention
  • Continuing improvements in the responsible use of feed ingredients, with the average feed conversion ratio for farmed salmon now at 1.3:1
  • GSI members employ almost 20,000 people across small and rural communities globally
  • Focus on ongoing positive social impact through meaningful interactions with local communities
  • Move towards greater use of innovative and holistic approaches to disease management

Piers Hart, Global Head of Aquaculture at WWF commented, “We have closely followed the work of the GSI for a number of years now, and are pleased to see further significant progress towards the initiative´s goal of achieving 100% ASC certified farmed salmon by 2020. Setting ambitious sustainability goals remains a crucial factor for every individual company. However, sector-wide transformation can only happen through collective sustainability initiatives such as the GSI, which represents almost 50% of the global salmon industry. That´s why we call upon all farmed salmon producers to become ASC certified, either individually or through GSI membership. We also hope it will be an incentive for retailers worldwide to continue to offer their consumers ASC certified salmon”.

The GSI Sustainability Report also demonstrates the preferable environmental performance of farmed salmon when compared to other protein sectors – such as chicken, beef and pork – including its low, and decreasing, feed conversion ratio (the lower this ratio, the more efficient an animal is at retaining the protein and energy from feed and converting it into food for humans), and low carbon footprint.

“We want to use our combined knowledge and global reach to raise the bar when it comes to environmental and social performance not only in the farmed sector, but across the food industry as a whole”, said Per Grieg, GSI Co-Chair and Chairman of the Board, Grieg Seafood ASA. “We want to lead by example, and demonstrate to other companies, and other sectors, that improving sustainability is a pre-competitive issue. What the GSI Sustainability Report demonstrates is that, through greater transparency and greater cooperation, it is possible to achieve change at scale which is good for the environment, and good for business”.

To view the GSI Sustainability Report and more information on the work of the GSI, please visit the website at: http://globalsalmoninitiative.org/sustainability-report


ABOUT GSI

The Global Salmon Initiative (GSI) is a leadership initiative established in 2013 by global farmed salmon producers focused on making significant progress on industry sustainability. Today, GSI comprises 12 companies – representing approximately 50% of the global salmon production industry – that are fully committed to realizing a shared goal of providing a highly sustainable source of healthy food to feed a growing global population, whilst minimizing our environmental footprint, and continuing to improve our social contribution.

GSI member companies are Bakkafrost; Blumar; Cermaq; Compañía Pesquera Camanchaca; Empresas AquaChile; Grieg Seafood ASA; Huon Aquaculture; Los Fiordos; Marine Harvest; Multiexport Foods S.A.; New Zealand King Salmon; and Ventisqueros. GSI companies have a presence in Australia, Canada, Chile, the Faroe Islands, Ireland, New Zealand, Norway and the UK, and make significant contributions to the economies of these respective countries.

In addition, the GSI also has a number of Associate Members in both the pharmaceutical and feed industries, including Benchmark Holdings plc; BioMar; Cargill; Elanco; Merck, Sharpe and Dohme (MSD) Animal Health; PHARMAQ; Salmofood; and Skretting.

 

For further information on the GSI:

 

Media contacts:
Sophie Ryan
AXON
+1 604 506 8414
sryan@axon-com.com

Cameron Donald
AXON
+ 44 (0)7710 388 627
cdonald@axon-com.com

GSF Q4 2016 – report and presentation

Grieg Seafood ASA: Q4 2016 – best quarter ever


 

 

 

 

 

 

 

Highlights – Fourth Quarter 2016

  • GSF’s best quarter ever with EBIT of MNOK 456 (EBIT per kg: NOK 21.80).
  • High harvest volume (20 917 tons) in a strong market.
  • The Board proposes a dividend of NOK 3 per share.
  • EBIT per kg: NOK 27.9 in Norway.
    • Fixed price contracts account for 32% of turnover.
    • ISA outbreak in Finnmark, otherwise stable production.
    • Production in Rogaland at good level.
  • EBIT per kg: NOK 7.0 in BC.
    • EBIT reflects challenges presented by algae in previous quarters.
    • Improved production throughout Q4.
  • EBIT per kg: NOK 8.8 in Shetland.
    • Final harvesting from weak locations.
    • The transition to an 18-month production plan is progressing as planned.
  • Expected harvest volume in 2017: 70 000 tons.


Fourth Quarter Results 2016

EBIT for the Group in before fair value adjustment of biomass was MNOK 456 in Q4 2016, against MNOK 43 in 2015. The harvest volume in Q4 2016 was 20 917 tons, against 15 279 tons in the same period in 2015, reflecting an increase of 37%.

EBIT from the four regions includes value creation from sales/Ocean Quality (OQ), while OQ’s value creation relating to fish from Bremnes (which owns 40% of OQ) appears in the item designated non-controlling interests in the table on page 4 in the report.

Before taxes and fair value adjustment of biomass, the accounts for Q4 show a profit of MNOK 456, compared with MNOK 5.5 in Q4 2015.

Group sales revenues in Q4 totalled MNOK 2 069, an increase of 74% on the corresponding figure in 2015.

The Board is satisfied with the 2016 profit. The profit is driven by high salmon prices, considerably improved production and lower rates of mortality. The employees’ contribution to the value creation has been significant, and in that regard all employees will receive an extra bonus on top of existing bonus agreements.  This cost is included in Q4 figures and the segment costs listed below.

The market price for salmon rose steadily throughout Q4 2016 in both Europe and the USA. This was reflected in a historically strong market at year-end.

In Norway, the proportion of salmon sold on fixed price contracts stood at 32% in Q4 2016, and this was a factor which reduced the level of realised prices. This proportion is expected to be around 60% in Q1 2017. The increase in the proportion of fixed price contracts must be considered in the light of a low harvest volume in Q1.


Measures to boost production and reduce costs

A stated goal is to reduce GSF’s cost level to the industry average, or lower. The company will also be aiming to increase production by 10% annually in the period 2018-2020.

GSF has an ongoing focus on improving operating efficiency, and this involves both increasing production per plant and per licence, as well as reducing costs per kilo.

One of the key steps being taken is to set out bigger smolt which will make it possible to shorten the production time in the sea. An increase in the number of smolt is also decisive to achieve growth and lower costs.

There is also a focus on improving the survival rate and wellbeing of the fish.


Outlook

In a global perspective, there are expectations of limited supply-side growth in the salmon market. There is strong underlying demand for salmon and good prices are therefore expected in 2017.

The harvest volume in Q1 2017 is likely to be 8 400 tons. For 2017 as a whole the figure is expected to be 70 000 tons, 8% up on 2016. The harvest volume is 3 000 tons less than planned due to an outbreak of ISA in Finnmark, as mentioned in the report.

For further information, please contact:

– CEO Andreas Kvame (cell phone: +47 907 71 441)
– CFO Atle Harald Sandtorv (cell phone: +47 908 45 252)

 

GSF Q4 2016 report
GSF Q4 2016 presentation

GSF Q3 2016 – report and presentation

Q3 2016 – Solid Q3 EBIT

 

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Highlights – Third Quarter 2016

  • Good quarterly results with EBIT of MNOK 186 (EBIT per kg: NOK 13.3).
  • Dividend of NOK 1 per share.
  • The market remains strong.
  • EBIT per kg NOK 15.2 in Norway.
    • Fixed price contracts accounted for 47%.
    • Good and stable biological situation.
  • EBIT per kg: NOK 4.0 in BC.
    • Algae resulted in production challenges (write-downs of NOK 5 per kg in Q3).
    • More robust plans for fresh water and sea production are in hand.
  • EBIT per kg: NOK 15.9 in Shetland.
    • Satisfactory results.
    • Sea lice, AGD and algae led to varying production in Q3.
  • Expected harvest volume 2017 of 73 000 tons (+11%), of which 48 000 tons from Norway (66% of total harvest volume).
  • Applications planned for 10 development licences.


Third Quarter Results 2016

EBIT for the Group in Q3 before fair value adjustment was MNOK 186, against MNOK -44 in 2015. The harvest volume in Q3 2016 was 13 911 tons, against 19 480 tons in the same period last year, reflecting a volume change of -28.5%.

EBIT from the four regions includes value creation from sales/Ocean Quality (OQ), while OQ’s value creation relating to fish from Bremnes (which owns 40% of OQ) appears in the item designated IKE in the above table.

Before taxes and fair value adjustment of biomass, the accounts for Q3 show a profit of MNOK 143, compared with a loss of MNOK 74 in the corresponding period last year.

Group sales revenues in Q3 totalled MNOK 1 553, an increase of 25% on last year’s corresponding figure.

Group expenses were above normal due to increased allocations to high costs related to the management options scheme. This amounted to MNOK 8 in Q3 and must be considered in the light of an increase in the share price.

Q3 is often a period characterised by increases in supply and a decline in salmon prices. But during this year’s Q3 salmon delivered to Oslo (NASDAQ) was as no time priced below NOK 50 per kg, confirming the strength of the market. The US market was stable throughout the period.

Due to the low harvest volume in Q3 the proportion of salmon sold on fixed price contracts was high (47% in Norway), which was a factor in the reduction in realised prices. This proportion is expected to be around 30% in Q4.
Measures to boost production and reduce costs

A stated goal is to reduce GSF’s cost level to the industry average, or lower. The company will also be aiming to increase production by 10% annually in the period 2017-2019.

GSF has an ongoing focus on improving operational efficiency, and this involves both increasing production per plant and per licence, as well as reducing costs per kilo.

One of the key steps being taken is to set out bigger smolt which will make it possible to shorten the production time in the sea. An increase in the number of smolt is also decisive to achieve growth and lower costs.

There is also a focus on improving the survival rate and wellbeing of the fish.


Outlook

In a global perspective, there are expectations of limited supply-side growth in the salmon market. There is strong underlying demand for salmon and good prices are therefore expected during the remaining months of 2016 and into 2017.

The harvest volume for Q4 2016 is expected to be 22 200 tons. This puts the overall volume for 2016 at 66 000 tons for 2016 which is 2 000 tons less than the quantity indicated in the last quarterly report. This change is due to lower production than expected in both BC and Shetland.

The harvest volume for 2017 is estimated at 73 000 tons, reflecting an increase of 11%, with Norway  accounting for most of the growth. In Finnmark, the increase in harvest volume is estimated at 20% in both 2016 and 2017. The expected growth in Rogaland is 25% in 2016 and 5% in 2017.

In order to secure further production capacity GSF will be applying for 10 development licences in Rogaland. The company is planning to use offshore technology in close collaboration with both farmed and oil-related technology suppliers.


For further information, please contact:

– CEO Andreas Kvame (cell phone: +47 907 71 441)
– CFO Atle Harald Sandtorv (cell phone: +47 908 45 252)

 

GSF Q3 2016 report
GSF Q3 2016 presentation

GSF Q2 2016 – report and presentation

 

Grieg Seafood ASA: Q2 2016 – strong EBIT

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Highlights – Second Quarter & First Half-Year 2016

  • Best-ever quarter with EBIT of MNOK 312 (EBIT/kg NOK 19.2).
  • EBIT of MNOK 526 is a record high for first half-year.
  • A historically strong market, but falling US prices at end of Q2.
  • EBIT/kg NOK 22.5 in Norway.
    – Fixed price contracts account for 31%.
    – Low harvest volume in Finnmark.
    – Lower costs in Rogaland.
  • Improved operating results in Shetland, EBIT/kg NOK 22.
  • Harvesting brought forward, in a strong market, in order to reduce the biological risk.
    – The Group’s harvest volume in Q2 2016 was 16 263 tons gutted weight.
  • The volume indication for 2016 has been reduced by 2,000 tons to 68,000 tons because of:
    – Increased harvest.
    – Weak production in BC due to algae.
    – Lost feeding days in Rogaland due to increased lice treatment.
  • Further improvement in key figures and financial base.
  • The sale of GSF’s UK activities has been considered, but the improvement in operations in the region has not been reflected to a sufficient extent in offers received.

 

Second Quarter results 2016

EBIT for the Group in Q2 before fair value adjustment of biomass was MNOK 312, against MNOK -21 in 2015. The harvest volume in Q2 2016 was 16 263 tons, against 17 558 tons in the same period last year, reflecting a decline in volume of 7.4%.

EBIT from the four regions includes value creation from sales/Ocean Quality (OQ), while OQ’s value creation relating to fish from Bremnes (which owns 40% of OQ) appears in the item designated IKE in the above table.

Before taxes and fair value adjustment of biomass, the accounts for Q2 show a profit of MNOK 273, compared with a loss of MNOK 20 in the corresponding period last year.

Group sales revenues in Q2 totalled MNOK 1 682, an increase of 44% on last year’s corresponding figure.

As Q2 started, the market was historically strong. In Europe prices strengthened further throughout the period, but the US market came under some pressure towards the end of Q2.

In Norway, the proportion of sales based on fixed price contracts stood at 31% in Q2 2016 and is expected to rise to 52% in Q3. The low harvest volume in Q3 will increase the contract proportion in this period, and it will fall in Q4.

 

Measures to boost production and reduce costs

A stated goal is to reduce GSF’s cost level to the industry average, or lower.  The company will also be aiming to increase production by 10% annually in the period 2017-2019.

GSF has an ongoing focus on improving operational efficiency, and this involves both increasing production per plant and per licence, as well as reducing costs per kilo.

One of the key steps being taken is to set out bigger smolt, which will make it possible to shorten the production time in the sea. An increase in the number of smolt is also decisive to achieve growth and lower costs.

We also focus on improved/good survival.

 

Outlook

In a global perspective, there are expectations of limited supply-side growth in the salmon market. There is strong underlying demand for salmon and good prices are therefore expected during the remaining months of 2016 and into 2017. The market may however come under sporadic pressure during some weeks in the course of Q3 2016, which could result in lower prices during these periods.

The US market is expected to develop particularly well in the second half of 2016 due to a reduction in offers from Chile.

The harvest volume for 2016 is expected to be 68 000 tons which is 2 000 tons less than the amount indicated in the first quarter report. The revised figure reflects the expectation that production is likely to be lower than expected in BC and Rogaland.

A harvest volume of 13 500 tons is expected in Q3. This is relatively low. In this regard, a significantly higher harvest volume is planned for Q4.

The process of hiring a new regional director in BC is ongoing.

 

For further information, please contact:

– CEO Andreas Kvame (cell phone: +47 907 71 441)
– CFO Atle Harald Sandtorv (cell phone: +47 908 45 252)

 

GSF Q2 2016 report

GSF Q2 2016 presentation