Grieg Seafood ASA: Q4 2023 results
Highlights
- Harvest volume of 21,767 tonnes (21,186 tonnes)
- Operational EBIT in the quarter of NOK -67 million (NOK 156
million), with operational EBIT/kg of NOK -3.1 (7.4). Full year
Operational EBIT of NOK 780 million, with an operational EBIT of
NOK 10.8 per kg
- Quarterly results impacted by historical biological events
- Good biological results of first harvest in Newfoundland, with
high survival and high share of superior quality
- Executing on post-smolt strategy, construction of 3,000 tonnes
capacity post-smolt facility in Finnmark initiated
- Initiatives to reduce costs by NOK 150 million over two years
as part of our improvement program
- Process to identify long-term partners to take part in the
development of Canadian operations is ongoing
- 76% of the harvested volume in the quarter ASC certified
- Expect to harvest 17,800 tonnes in Q1 2024
- Target harvest volume of 81,000 tonnes for the full year
2024
Financial results
Operational EBIT for Grieg Seafood was NOK -67 million in the
fourth quarter, compared to NOK 156 million in the corresponding
period 2022. Harvest volume was 21,767 tonnes during the period
(21,186), which gives an operational EBIT per kg of NOK -3.1
(7.4).
Operational EBIT/kg in Rogaland ended at NOK 10.4 (13.8) and was
impacted by a superior share of 86% compared to 91% in the
corresponding period last year, and somewhat unfavourable timing of
harvest. Underlying production was good, with a strong 12-months
survival rate at 94%. The farming cost ended at NOK 67.2 per kg
during the quarter, up from NOK 54.6 per kg in Q4 2022 and NOK 65.8
per kg in Q3 2023. The increase in cost mainly relates to
historical ISA events and lower harvest volume.
In Finnmark, harvest volume for the quarter ended at 10,387
tonnes, 1,800 tonnes below guidance. The lower volume is mainly
related to impact from the Spiro-parasite, winters ulcers and
string jellyfish. Operational EBIT/kg ended at NOK 6.2,
impacted by weak biological performance and lower price achievement
due to a superior share of 64%.
Operational EBIT/kg in British Colombia was negative NOK 7.9,
compared to negative NOK 22.9 in Q4 2022. Farming cost was impacted
by historical biological issues and write downs. However, seawater
performance was good during the quarter, with a 12-month survival
rate of 91%.
In Newfoundland, an important milestone was reached this quarter
when the company started harvesting of the first generation of
fish. Total harvest volume during the quarter was 3,184 tonnes.
This is some 1,800 tonnes below guidance, postponed to 2024 due to
weather conditions and positive market expectations. Realized price
was NOK 74.0 per kg and the superior share was 97%.
“Our results in the fourth quarter were impacted
by continued weak biological performance in Finnmark. The Spiro
parasite, winter ulcers and jellyfish have impacted survival rates
and operational efficiency in Finnmark and led to reduced volumes,
increased handling cost and lower price achievement. I am not
satisfied with the results, and we have taken measures to address
the challenges both in the short and medium term.
The Spiro alone is estimated to cause a total
loss of NOK 900 million since it was detected in 2022 at our
freshwater facility in Finnmark, most of which has previously been
realized. We have implemented measures to prevent Spiro from
entering our facility again with good results. All fish that was
transferred to the ocean farms in 2023 were Spiro free, and we
expect impact from Spiro to cease after we have harvested out the
last fish groups from the 2022 generation during Q2.
In Newfoundland, we successfully conducted the
first harvest with a volume of 3,184 tonnes, a superior share of
97% and favorable reception from the North American market. The
seawater production in Newfoundland continues to be strong with a
12-month survival rate of 95%.
It has been a tough quarter, and my colleagues
have worked hard in all regions to implement improvement measures
and move forward. I want to thank them all for their efforts. I am
confident that we are on the right path and that we will see
results during 2024” says CEO Andreas Kvame in Grieg Seafood.
OutlookThe global harvest of
Atlantic salmon in 2024 is expected to increase by 2%, to a total
of 2.9 million tonnes. With limited supply growth, combined with
continuing strong demand development, Grieg Seafood believes in
sustained strong market prices in 2024.
Grieg Seafood generally targets an annual
contract share of 20-50%. Estimated contract share for the
Norwegian operations is 7% for Q1 2024 and 6% for the full year
2024.
In the first quarter of 2024, expected harvest volume is 17,800
tonnes, allocated as follows:
- Rogaland: 7,000 tonnes
- Finnmark: 5,000 tonnes
- BC: 800 tonnes
- NL: 5,000 tonnes
The company guides for a harvest volume of
81,000 tonnes in 2024, allocated as follows:
- Rogaland: 28,000 tonnes
- Finnmark: 27,000 tonnes
- BC: 15,000 tonnes
- NL: 11,000 tonnes
Results presentationChief
Executive Officer, Andreas Kvame and Renete Kaarvik, the Global
Finance Officer, who will be standing in for the Chief Financial
Officer during his planned sick leave, will present the results at
Hotel Continental, Stortingsgaten 24/26, Oslo today at 8:00 a.m.
CET.
Following the presentation, questions from the
audience will be admitted.The presentation and the subsequent
Q&A will be held in Norwegian.
A live webcast from the presentation can be
accessed
at https://investor.griegseafood.com/reports-&-presentations#quarterly
or with thefollowing link:
https://channel.royalcast.com/landingpage/hegnarmedia/20240222_2/
Webcast participants need to register to post
questions.
An English transcript of the presentations will
be made available at www.griegseafood.com.
For further enquiries, please
contact:Andreas Kvame, CEOCell phone: +47 907 71 441
About Grieg SeafoodGrieg
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 publicly disclosed in
accordance with section 5-12 of the Norwegian Securities Trading
Act as well as the Regulation (EU) No 596/2014 of the European
Parliament and of the Council of 16 April 2014 on market abuse
(market abuse regulation).
- 2023 Q4 GSF quarterly report
- 2023 Q4 GSF quarterly presentation
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