Author Archives: Ole Jørn Borum

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.

Annual Report 2018 published

Please find attached the Grieg Seafood Integrated Annual Report 2018, including sustainability reporting and complete annual accounts with notes, as adopted by the Board of Directors.

For further information, please contact:

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

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

Please click image for web version:

Grieg Seafood among top ten on gender equality index

While the seafood industry is still heavily male-dominated, it is moving in the right direction. Grieg Seafood climbed to an 8th place on the SHE Index for 2019.

Andreas Kvame, CEO of Grieg Seafood.

“We have a very long way to go before we have reached gender equality both in the industry and in Grieg Seafood. That goes particularly for employment in production. We are, however, working systematically to get women into the company and into management positions,” says Andreas Kvame, CEO of Grieg Seafood.

The accounting and consulting firm EY and the Norwegian gender equality firm SHE is behind the SHE Index, which measures gender balance and gender equality in companies. The Index is scoring companies based on the gender balance in management teams on different levels, as well as the company’s policies to improve female representation in management.

From the seafood industry, Bremnes Seashore and AKVA group have also decided to participate in the SHE Index.

The industry must roll up its sleeves

Andreas Kvame believes that the seafood companies have been single minded in recruitment for too long, and that the industry must start rolling up its sleeves.

«Over the next years, the aquaculture industry will develop a great number of new solutions aimed at reducing our environmental footprint and improving fish welfare. We need the most talented people, regardless of gender, age and other backgrounds,” Kvame states.

“Diversity is not only the right thing to do. It definitely also serves our own interests.”

So far, the SHE Index is comprised of Norwegian companies. EY and the SHE is, however, working to expand it to international businesses as well. They are soon launching the SHE Index for India.

For more information about the SHE Index, please see:

www.shecommunity.com

Q4 2018 – Ending 2018 with record high harvest volume

CLICK IMAGE TO VIEW THE Q4 REPORT

Highlights

  • EBIT NOK 351 million (NOK 151 million), EBIT per kg NOK 14.81; up 84% from to Q4 2017
  • Earnings driven by high prices and cost reduction per kg
  • Harvest volume of 24 000 tonnes (+27%) driven by strong biological performance in Norway
  • Good production with high average harvest weight in BC, continued high cost due to challenges in previous quarters
  • High cost in Shetland due to continued biological challenges
  • Awarded A- by the Carbon Disclosure Project on actions related to Climate Change
  • Expected harvest volume of 82 000 tonnes (+10%) in 2019

Financial results

The Grieg Seafood Group harvested 23 682 tonnes GWT in Q4 2018, compared to 18 667 tonnes in Q4 2017, compared to 18 667 tonnes in Q4 2017.

The average realized price for Grieg Seafood was up by NOK 5.55 per kg compared to Q4 2017.

Grieg Seafood’s total operating income in Q4 2018 amounted to NOK 2 128 million, an increase of 23% compared to the same period last year .

The farming cost (total cost related to fish harvested this quarter) increased by NOK 0.43 per kg compared to the same quarter last year. This is mainly related to high cost of harvested fish in BC and on Shetland that was affected by harmful algal bloom (HAB) and gill-related diseases.

The Group’s EBIT before fair value adjustment of biological assets was NOK 351 million during the quarter, compared to NOK 151 million in the same quarter of 2017. EBIT per kg amounted to NOK 14.81 for the period, up from NOK 8.07 in Q4 2017.

In 2018 the Grieg Seafood Group’s operating income totaled NOK 7 552 million, compared to NOK
7 038 million in 2017. Higher prices and volumes contributed positively. Total harvest volume for the year was 74 623 tonnes GWT, up from 62 598 tonnes GWT in 2017.

EBIT per kg was NOK 14.72, compared to NOK 14.45 in 2017. EBIT per kg was positively affected by the large harvest volume and high spot prices, however the cost related to pancreas disease (PD), HAB and gill diseases during the year had a negative impact, both in terms of high cost and price achievement. Total farming cost per kg for the Group was NOK 43.1, NOK 0.7 above our targeted cost of NOK 42.4 for the year.

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

“Q4 2018 ended a strong year for Grieg Seafood in which we reached our last guiding harvest volume of 75 000 tonnes – an increase of 20% compared to 2017 – and revenues of more than NOK 7.5 billion. This was achieved by maintaining a strict focus on sustainability and driving forward improvements to our farming operations.

Throughout the year we introduced several initiatives, including advanced sensor- and monitoring systems across our four regions. In September we opened a new operations center in Rogaland, supporting our digitalization strategy utilizing big data analytics to improve overall operational performance.

We are proud of receiving the second highest grade by the Carbon Disclosure Project, which scores companies based on their work to cut carbon emissions. With improved operations and by maintaining a strict focus on sustainable farming and on securing fish welfare, we are well prepared to continue executing on our growth strategy, targeting 100 000 tonnes in 2020 with cost at or below industry average”

Strategic priorities

Grieg Seafood’s objective is to ensure sustainable growth in the years ahead by combining skilled and motivated people, new technology and to increasingly farm salmon on nature’s terms. The goal is to increase sustainable production to reach an annual harvest volume of 100 000 tonnes in 2020. We are also aiming for production cost at or below weighted industry average, targeting NOK 37.90 per kg by 2020. In Norway, the target is NOK 36.00 per kg by 2020.

To ensure progress towards our goal for sustainable growth, we have initiated the GSF 2020 improvement program, with specific targets and initiatives for each region. The program contains four strategic priorities;
1) digitalization
2) post-smolt strategy
3) biosecurity and fish welfare
4) expansion opportunities

Through its 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%. In 2018, average survival rate was 91%.

Outlook

The global supply of Atlantic Salmon for 2019 is expected to increase while demand growth is expected to remain stronger than supply growth, contributing to continued good prices going forward.  

Grieg Seafood expects to harvest approximately 82 000 tonnes in 2019, an increase of 10% from 2018. The expected harvest volume for Q1 2019 is 13 200 tonnes.

Results presentation

CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results later today at 09:00 CET 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: http://webtv.hegnar.no/presentation.php?webcastId=97603010

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. Approximately 780 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.

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

Kristina Furnes is new Global Communications Manager in Grieg Seafood

The salmon farming company strengthens its strategic communications capabilities with the appointment of advisor from Scandinavia’s largest communications agency.

“Our industry gets to use fjords that belong to all to produce our healthy salmon. We need to be trusted partners of the communities where we operate. The employment of Kristina Furnes is a new step in our efforts to improve the dialogue with society around us, also in cooperation with other actors in the industry. We are happy that she will join our team” says Andreas Kvame, CEO of Grieg Seafood.

Furnes is a former communications advisor at Scandinavia’s largest communications agency, Geelmuyden Kiese, where she has been for over 3 years. She has worked a great deal with issues related to various parts of the seafood industry. She is a political scientist from the University of Oslo.

“The aquaculture industry will become increasingly important in providing healthy food to a growing global population. As a leading actor in the industry, Grieg Seafood has set ambitious goals on sustainability, digitalization and growth. I am thrilled to join the company,” says Furnes.
Furnes starts on January 2, 2019.

For more information, please contact:
CEO Andreas Kvame: 0047 90771441

Grieg Holdings AS: Restructuring of shareholding

Grieg Holdings AS, main shareholder in Grieg Seafood ASA (“Grieg Seafood”), has today decided to transfer all its shares in Grieg Seafood to Grieg Aqua AS through a demerger. Grieg Aqua AS will be established when the demerger is completed. The parent company of Grieg holdings AS, Grieg Maturitas II AS, will be the sole shareholder of Grieg Aqua AS.

Through the demerger 55 801 409 shares, corresponding to 49.97% of the outstanding shares in Grieg Seafood, are transferred. Grieg Holdings AS will not hold any shares in Grieg Seafood after the transaction.

In addition Grieg Ltd AS (owned 100% by Grieg Maturitas II AS) holds 217 390 shares, corresponding to 0.20%. The shares held by Grieg Ltd AS will be transferred to Grieg Aqua AS when the demerger of Grieg Holdings AS is completed.

In total Grieg Maturitas II AS holds 56 018 799 shares in Grieg Seafood through its subsidiaries, corresponding to 50.17% of the outstanding shares.

The Oslo Stock Exchange has, pursuant to section 6-2 (3) of the Norwegian Securities Trading Act, granted an exemption from the mandatory offer obligation with respect to the transactions.

This information is subject to the disclosure requirements pursuant to Sections 4-2 and 4-3 of the Norwegian Securities Trading Act.

 

CMU: A salmon farming pioneer entering the digital era

2020 volume target reaffirmed, ensuring a platform for sustainable growth

Grieg Seafood is hosting a Capital Markets Update in Oslo, Norway today 5 September 2018 under the headline “A salmon farming pioneer entering the digital era”.

Grieg Seafood represents 25 years of salmon farming. While the company’s harvest volumes have remained stable for a period of time, revenues have grown substantially in recent years driven by higher salmon prices. This has also led to improved profitability. Looking ahead, Grieg Seafood plans to grow harvest volumes substantially and continuously improve the sustainability of operations.

The company today confirmed its growth ambitions with a target of annual harvest volume of 100 000 tons in 2020 with cost at or below industry average. Furthermore, that the company is building a platform for further sustainable growth beyond 2020.

Grieg Seafood’s operational and financial targets presented at the capital markets update today are:

  • Harvest volume of 100 000 tons in 2020: Increasing harvest volumes to 100 000 tons in 2020, mainly through improving utilization of current capacity.
  • Cost at or below industry average in 2020: Aiming for a production cost in line with or below weighted industry average, targeting NOK 37.90/kg by 2020. Reduction mainly driven by better operational efficiency from higher volumes and improved biology.
  • NIBD to EBITDA ratio below 4.5: Balancing the Groups net interest-bearing debt with level of earnings before interest and depreciations, not exceeding a ratio of 4.5 times.
  • Equity ratio above 35%: At any given time, the Group shall have a level of equity which is appropriate in relation to the Group’s cyclical activities. The Board requires that equity consistently stay in accordance with current loan terms, as a minimum.
  • NIBD/harvest volume of NOK 20/kg: Balancing the Company’s debt levels with harvest volumes, aiming for a net interest-bearing debt of NOK 20 per kilo fish harvested.
  • Return on capital employed (ROCE) of 12%: Requirement of a minimum of 12% return on capital employed for all investment decisions.
  • Dividend policy to distribute 25%-35% of the Group’s net profit after tax adjusted for fair value appraisals: The Group’s objective is to give the shareholders a competitive return on invested capital through dividend payments and value appreciation of the share, which is at least at the same level as other companies with comparable risk. The future dividend will depend on the Group’s future earnings, financial situation and cash flow. The Board believes that the dividend paid should develop in pace with the growth of the Group’s profits, while at the same time ensuring that equity is at a healthy and optimal level and that there are adequate financial resources to prepare the way for future growth and investment and taking into account the wish to minimize capital costs. The Board believes it is natural that the average dividend, over a period of several years, should correspond to 25-35% pre-tax profit, adjusted for the accounting effect of fair value adjustment of biological assets.

Furthermore, it is reasonable that the company’s net interest-bearing debt per harvested kg at NOK 20. Based on this, the size of the dividend could be corrected both up and down according to the 25 – 35 % share of profit after tax.

Grieg Seafood’s strategic focus areas to achieve its targets and ensure sustainable growth are:

  1. Sustainability: Grieg Seafood wants to actively ensure sustainable food production in the ocean and invest its resources accordingly. Healthy fish, clean seas and economic profit are not regarded as contradictions. The company’s sustainability strategy is based on five pillars; sustainable value chain, profitable growth and innovation, good jobs for everyone, sustainable faming and productive oceans, and local value creation.
  2. Post smolt strategy: Through investments in post-smolt production, Grieg Seafood aims to improve biology, increase productivity and reduce cost. The main effect from larger smolt is increased robustness and shorter time to reach harvest size. The combination of stronger fish and reduced exposure to biological risk, will improve biology and increase survival rates.
  3. Digital salmon farming: By applying advanced sensor systems, big data, artificial intelligence and automation, Grieg Seafood aims to generate actionable insights to increase yield and resource efficiency.
  4. Biosecurity and fish welfare: Biosecurity and fish welfare is vital to secure sustainable growth and high harvest quality. Grieg Seafood aims to secure strong biological performance through implementation of a broad range of technological and operational initiatives, including post smolt strategy, GSF Precision Farming and preventive measures to prevent sea lice and algae issues.
  5. Expansion opportunities: Expansion to secure fulfillment of Grieg Seafood’s goal of harvesting 100 000 tons in 2020 will mainly come from improved utilization of existing capacity, driven by post-smolt strategy, digital salmon farming and improved biosecurity and fish welfare. To secure sustainable growth longer term, additional opportunities will be pursued, including acquiring new capacity, acquisitions and joint ventures and development of new concepts.

Commenting on Grieg Seafood’s capital markets update, Andreas Kvame, CEO, said:

“Our objective is to ensure sustainable growth in the years ahead by combining great people, nature and technology. We believe salmon will be an increasingly important food source globally, and that Grieg Seafood will be able to create value for multiple stakeholders, including the communities in which we operate, our employees and shareholders, while we provide salmon to the world.”

Presentation and lunch

The Astrup Fearnley Museum Strandpromenaden 2, 0252 Oslo Norway

Registration at the event from 8:30am CEST and presentations from 9:00am – 1:00pm CEST.

Lunch will be served from 1:00pm CEST.

Break-out sessions from 1:30 CEST.

Webcast

A live webcast of the presentations will be made available on our website: https://www.griegseafood.no/inverstors/webcast-2/ 

Materials

The presentations held at the Capital Markets Update event will be available on the company’s website www.griegseafood.no.

For further information, please contact:

  • Andreas Kvame, CEO, tel: +47 907 71 441
  • Atle Harald Sandtorv, CFO, tel: +47 908 45 252

About Grieg Seafood

Grieg Seafood ASA is one of the world’s leading fish farming companies, specializing in Atlantic salmon. The company has an annual production capacity of around 100.000 tons gutted weight.

The Group is today present in Norway, British Columbia (Canada) and in Shetland (UK), employing approximately 700 people. Grieg Seafood ASA was listed at the Oslo Stock Exchange OSEBX) in June 2007. Our headquarters are located 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.no

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


Webcast

Sections and presenters

1 A salmon farming pioneer entering the digital era – Download
Andreas Kvame, CEO

2 Ensuring sustainable growth- Download
Andreas Kvame, CEO and Trond Kathenes, CDO

3 Our four regions and their priorities – Download
Finnmark, Roy-Tore Rikardsen, Regional Manager
Rogaland, Knut Utheim, Chief Operating Officer
Shetland, Grant Cumming, Regional Manager
British Columbia, Rocky Boschman, Regional Manager

4 GSF Financial targets and investments in sustainable growth – Download
Atle Harald Sandtorv, CFO

Download the GSF CMU presentation

Transcript from Norwegian to English

Transcript Grieg Seafood CMU_Finnmark and Rogaland

Invitation to Capital Markets Update

Grieg Seafood ASA is pleased to invite investors, analysts, media and other stakeholders to a Capital Markets Update.

Date:
Wednesday 5 September 2018.

Location:
The Astrup Fearnley Museum
Strandpromenaden 2, 0252 Oslo
Norway

During the event, Grieg Seafood will provide an update on the company’s goals, strategy, operations, financial developments and outlook.

The day will include presentations by CEO Andreas Kvame and CFO Atle Harald Sandtorv as well as the directors of all of Grieg Seafood’s regions; Rogaland, Finnmark, Shetland and British Columbia

See full invitation here

Q2 2018 – High harvest volume in Q2

Grieg Seafood Rogaland
Foto: Tommy Ellingsen

Highlights – Q2 2018

  • Highest harvest volume for a quarter (22 568 tonnes)
  • High prices on strong demand
  • EBIT/kg NOK 18.89, total EBIT NOK 426 million
  • Good production in Finnmark, BC and on Shetland
  • Production in Rogaland negatively impacted by PD
  • Algal bloom causing loss of 1 000 tonnes in BC
  • Estimated harvest for the year is 75 000 tonnes, up 20% from 2017
  • Dividend of NOK 2.00 per share paid out

Results Q2 2018

The Grieg Seafood Group harvested 22 568 tonnes of salmon in Q2 2018, compared to 18 503 tonnes in Q2 2017, an increase of approximately 22%.

The average spot price (Nasdaq Salmon Index) for the period was NOK 68.81 per kg, up by NOK 0.98 per kg compared to the same period in 2017. The average realized price for Grieg Seafood was down by NOK 3.21 per kg comparing these quarters. This was partly due to a combination of a high proportion of harvesting towards the end of the quarter when prices were lower, and partly due to lower price achievement for PD-affected fish from Rogaland

Grieg Seafood’s total operating income in Q2 2018 amounted to NOK 2 318.7 million, an increase of 14% compared to the same period last year.

The farming cost (total cost related to fish harvested this quarter) decreased by NOK 1.54 per kg compared to the same quarter last year. Higher harvested volume in Finnmark and BC contributed positively.

The Group’s EBIT before fair value adjustment of biological assets was NOK 426.3 million during the quarter, compared to NOK 392.3 million in the same quarter of 2017. EBIT per kg amounted to NOK 18.89 for the period, down from NOK 21.20 in Q2 2017.

Strategic priorities

Grieg Seafood has an overall goal of increasing production by at least 10% annually until 2020, with the main growth in 2019. Furthermore, the Group has an ambition to achieve production cost at or below the industry average.

Continued access to high-quality smolt is critical to ensure future growth. In addition, larger smolt will result in shorter production time in sea, thus contributing to reduced biological risk and increased survival. Another essential aspect of Grieg Seafood’s growth strategy is the increased utilization of the Group’s licenses. High site flexibility is essential to improve utilization, and Grieg Seafood cooperates with local authorities on an ongoing basis to optimize flexibility.

Increased volumes, improved capacity utilization and shorter production time in sea will contribute to higher efficiency and reduced production costs. The Group also continually undertakes cost-reducing initiatives and has established an internal improvement program, scheduled to run until 2020.

Market developments

Salmon prices were very volatile in the second quarter of 2018. Despite of this the average price level was high compared to Q1 2018. The salmon supply has been higher month by month compared to Q2 2017, which in relation to the high average prices confirms the strong underlying demand for farmed salmon.

The Group’s total share of fixed price contracts in Norway in Q2 2018 was 27%. For Q3 the share of fixed price contracts is estimated to be 31%, with an estimate of 30% for the full year.

Outlook

Supply growth is limited and expected to stabilize going forward. The strong underlying demand for salmon is likely to continue, and prices are expected to remain strong for the rest of 2018.

Grieg Seafood expects to harvest approximately 17 100 tonnes in Q3 2018 and 75 000 tonnes for the full year 2018, corresponding to an increase of 20% from 2017. The full year estimate has been reduced by 5 000 tonnes due to PD in Rogaland and algal bloom in BC.

Please find enclosed the company’s Q2 2018 report and presentation.

For further information, please contact:

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

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

ATTACHMENTS:

GSF Q2 2018 Presentation
GSF Q2 2018 Report

 

 

Q1 2018 – Good biology, supporting further growth

Open 2018 Q1 GSF Quarterly report
Open 2018 Q1 GSF Presentation

 

Highlights – Q1 2018

  • Solid production in Finnmark, BC and UK
  • Production in Rogaland negatively impacted by low sea temperatures and PD
  • Higher fixed cost/kg due to lower harvest volumes
  • Spot prices increased throughout Q1 2018
  • EBIT/kg NOK 14.18
  • Harvest guiding 2018 of 80,000 tons maintained, up 28 % from 2017
  • Proposed dividend of NOK 2.00 per share

Results Q1 2018

Grieg Seafood harvested 11,433 tons in Q1 2018, up 34 % compared to 8,522 tons harvested in Q1 2017. The average spot price was down NOK 5.36 per kg compared to the same period last year. For Grieg Seafood the price achieved was only down by NOK 2.70 per kg. This is mainly due to high harvest volumes towards the end of the quarter, when the spot price was at its highest.

The resulting operating revenues for the first quarter 2018 was NOK 1,493.0 million, a 5 % increase compared to Q1 2017.

Operating costs/kg were down by NOK 1.00 in the quarter, mainly as a result of higher harvest volumes in addition to a more stable biological situation. The lower costs combined with strong price achievement in the quarter resulted in an EBIT/kg of NOK 14.20, down compared to NOK 15.40/kg in Q1 2017.

The company’s EBIT (operating income) before fair value adjustments were NOK 162.1 million in Q1 2018, up from NOK 131.5 million in Q1 2017.

Strategic priorities

Grieg Seafood’s overall goal is to maintain an annual production growth of minimum 10 % until 2020. Furthermore, the company aims to keep production costs at- or below the industry average.

Continued access to high-quality smolt is critical to ensure growth going forward. In addition, larger smolt will result in shorter production time at sea, thus contributing to reduced biological risk and increased survival. Another pivotal aspect of Grieg Seafood’s growth strategy is the increased utilization of the company’s licenses. High site flexibility is essential to improve utilization, and Grieg Seafood cooperates with local authorities on an ongoing basis to optimize flexibility.

Increased volumes, improved capacity utilization and shorter production time at sea will contribute to higher efficiency and reduced production costs. The company also continually undertakes cost reducing initiatives and has established an internal improvement program, which scheduled to run until 2020.

Market developments

Salmon prices increased in Q1 2018 compared to Q4 2017. Year-to-date, the supply of salmon has been lower than previously expected, which can partly be explained by the lower-than-normal sea temperatures in Norway. The spot price increase in the quarter points to a continued strong demand for salmon.

The Group’s total share of fixed price contracts in Norway was 46 % in Q1 2018. The high contract share was mainly due to the low harvest volume in the period. For Q2 2018, the estimated share of fixed price contracts is 27 %. For 2018 as a whole, the company expects a fixed price contract share of approximately 28 %.

Outlook

Low global production has led to increased spot priced throughout Q1 2018. The relationship between supply and demand is expected to stabilize in the longer term, which will likely give grounds stable, strong market prices in the future.

GSF expects to harvest approx. 21,400 tons in Q2 2018. For 2018 as a whole, the company expects to harvest approximately 80,000 tons, which corresponds to a 28 % increase over 2017.

Please find enclosed the company’s Q1 2018 report and presentation.

For further information, please contact:

– CEO Andreas Kvame (cell phone: +47 907 71 441)

– CFO Atle Harald Sandtorv (cell phone: +47 908 45 252)

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