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 %.


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.