Grieg Seafood ASA: Q1 2023 results
Highlights
- Harvest volume of 15,357 tonnes (16,916 tonnes)
- Operational EBIT in the quarter of NOK 385 million (NOK 453 million), with operational EBIT/kg of NOK 25.1 (26.8)
- Salmon market remains strong, supporting earnings
- Harvest volume above guidance due to advanced harvesting related to biological challenges. Increasing smolt release to compensate and rebuild biomass
- Newfoundland developing according to plan
- 81% of harvested volume in the quarter was ASC certified
- Dividend proposal of NOK 4.5 per share based on a record high 2022 result, subject to approval by the Annual General Meeting in June 2023
- Expect harvest of 21,300 tonnes in Q2 2023 and 80,000 tonnes for the year 2023
Financial results
Operational EBIT for Grieg Seafood was NOK 385 million in the first quarter of 2023, compared to NOK 453 million in the corresponding period last year. Harvest volume was 15,357 tonnes during the period (16,916), which gives an operational EBIT per kg of NOK 25.1 (26.8).
Harvest volume in Rogaland was 7,502 tonnes in the quarter (9,645), 2,200 tonnes above guidance due to advance harvesting to reduce biological risk related to Infectious Salmon Anemia (ISA) at one site and winter ulcers. Operational EBIT/kg ended at NOK 38.4 for the quarter (33.5) and was impacted by a reduced superior share, negative contribution from contracts and reduced average harvest weight.
In Finnmark, harvest volume was 7,856 tonnes in the quarter (5,175), 2,100 tonnes above guidance due to advance harvesting related to the Spiro parasite (Spironucleus salmonicida) and winter ulcers. No new incidents of Spiro have been detected at the freshwater facility during the first quarter. Operational EBIT/kg for the quarter ended at NOK 20.1 (25.0), impacted by a low superior share, low average harvest weight and negative contribution from contracts.
To compensate for the advance harvesting in Finnmark, Grieg Seafood will increase smolt release for the remainder of the year to rebuild biomass. However, the initiative is not expected to fully compensate for the lost biomass, and the 2023 harvest target for Finnmark is reduced from 28,000 to 26,000 tonnes.
In BC, there was no harvest during the first quarter. This was according to plan to prioritize growing of biomass. Seawater performance was good during the quarter with stable survival rate at 92%. In Q1 2022 harvest volume in BC was 2,096 tonnes.
In Newfoundland, freshwater production was good during the quarter, with good fish health and growth. Next transfer of smolt to sea is scheduled for late spring or early summer 2023. Seawater production in the region is developing according to plan, with high survival and no sea lice issues. First harvest from this new region is expected to commence towards the end of 2023.
Commenting on the quarter, Andreas Kvame, CEO of Grieg Seafood ASA said:
“The markets for Atlantic salmon remained strong during the quarter, with solid demand from both the retail, and the hotel and restaurant segments. On the farming side we were still impacted by biological challenges in the beginning of the year, though biology improved throughout the quarter and is currently good in Rogaland, BC and Newfoundland. Like in the previous quarter, Finnmark is still impacted by the Spiro parasite. Mitigating measures have been taken to address the issues. The fish in Newfoundland handled a cold winter in the sea well and the development of the region is going according to plan.
In Norway, we are expecting the final proposal of the resource tax to be made public soon. The current version of the tax would negatively impact a sustainable development of the industry in Norway significantly. We sincerely hope that the Parliament will make the necessary changes to secure continued innovation, investments and development throughout the production cycle, which is necessary to improve biology and sustainability of Norwegian salmon farming.”
Outlook
Global harvest of Atlantic salmon in 2023 is expected to be in line with 2022. The current harvest estimates indicate a significant difference between supply volumes in the first and second half of 2023, the same pattern as observed in 2022. Grieg Seafood expects a continued strong salmon market going forward.
Grieg Seafood generally targets an annual contract share of 20-50%. Estimated contract share for the Norwegian operations in Q2 2023 is 12% and 15% for the full year 2023. The contract market is somewhat subdued due to uncertainty related to the proposed resource rent tax on salmon in Norway.
In Q2 2023, expected harvest volume is 21,300 tonnes, distributed as follows:
- Rogaland: 10,500 tonnes
- Finnmark: 5,500 tonnes
- BC: 5,300 tonnes
Grieg Seafood guides for a harvest volume of 80,000 tonnes in 2023, down from previously guided 82,000 tonnes.
- Rogaland: 29,000 tonnes
- Finnmark: 26,000 tonnes
- BC: 20,000 tonnes
- NL: 5,000 tonnes
Results presentation
Grieg Seafood ASA will release its first quarter 2023 report on Friday, 12 May 2023, at 6:00 a.m. CEST.
The same day at 8:00 a.m. CEST, CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results live at Hotel Continental, Stortingsgaten 24/26, Oslo.
Following the presentation, it will be opened up for questions from the audience. The presentation and the subsequent Q&A will be held in Norwegian.
A live webcast from the presentation can be accessed at www.investor.griegseafood.com or with the following link:
https://channel.royalcast.com/landingpage/hegnarmedia/20230512_1/.
Webcast participants need to register to post questions. A recording of the webcast and an English transcript of the webcast will be made available on our website.
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. Our farms are in Finnmark and Rogaland in Norway, as well as in British Columbia and Newfoundland in Canada. Our headquarter is located in Bergen, Norway. Grieg Seafood ASA was listed at the Oslo Stock Exchange in June 2007. More than 750 people work in the Company throughout our regions.
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. Towards 2026, we aim for global growth, cost improvements and to evolve from a pure salmon
supplier to an innovation partner for selected customers.
To learn more, please visit www.griegseafood.com
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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