Grieg Seafood ASA: Q2 2022

highlights

  • Operational EBIT of 986 million NOK, with an operational EBIT/kg of 41.6 NOK, driven by exceptionally high prices and good biological performance
  • Accelerated harvest taking advantage of high market prices – good coordination between cultivation and sale
  • First fish in the sea in Newfoundland with a high survival rate
  • Seawater production good in all regions with stable survival
  • Group housing cost of NOK 48.6 per kg (NOK 50.7 in Q2 2021). NOK 42.7 per kg for Norwegian operations, despite inflationary pressures
  • Expect a harvest of 21,400 tonnes in Q3 2022 and 87,000 tonnes for the full year 2022

Financial results

Grieg Seafood’s operating EBIT was NOK 986 million in the second quarter, compared to NOK 44 million in the same period last year. The harvest volume during this period was 23,700 tonnes (17,800), resulting in an operational EBIT per kg of NOK 41.6 (2.4).

As a continuation of the positive trend in Q1, the second quarter of 2022 also became historic. Due to the strongest market the industry has seen coupled with solid production, I am proud to report Grieg Seafood’s best single quarter results ever. I would like to sincerely thank all of my dedicated and hard working colleagues in both farming and sales for their efforts and accomplishments throughout the quarter. In line with the strategy of our integrated sales organization, we have successfully advanced some harvests to take advantage of the strong prices in the market.” says CEO Andreas Kvame of Grieg Seafood.

Norwegian farms delivered record results for the quarter, driven by high prices and good biological performance. Results in both Rogaland and Finnmark were positively impacted by strong price realization due to high average crop weights and positive cost development.

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Results in British Columbia were solid, driven by good price development from premiums on VAP products, in addition to stable costs from harvesting from good biologically performing sites.

In Newfoundland, the fish that are put into the sea perform well, with high survival rates and no problems with sea lice. Currently, two million smolts have been transferred to the sea, with harvest starting in late 2023.

outlook

The global Atlantic salmon harvest in 2022 is expected to decline by 1%, with all major regions seeing declining volumes. In the first half of 2022, the global harvest fell by 4% compared to the first half of 2021. Consequently, harvest volume for the second half of 2022 is expected to increase by almost 1% compared to the corresponding period in 2021.

Given the limited supply growth in the second half of 2022, Grieg Seafood expects good market conditions going forward. However, the current inflation, which is reducing the purchasing power of households, could impact demand in both the HoReCa and retail segments.

In recent years, Grieg Seafood has reduced operating costs through operational improvement initiatives. However, general cost inflation and, in particular, higher feed prices are expected to gradually affect farm costs in the future.

Grieg Seafood’s cost ambition remains – to be cost leader in all regions in which the company operates. To achieve this, the company is executing on its strategic priorities – post-smolt, preventative farming practices, digitization, integrated operations and leveraging existing capacity.

Grieg Seafood generally aims for an annual contract share of 20-50%. The estimated contract share for the Norwegian operations in the third quarter of 2022 is 37% and 22% for the full year 2022.

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In the third quarter of 2022, the expected harvest volume is 21,400 tons, distributed as follows:

  • Rogaland: 7,100 tons
  • Finnmark: 7,100 tons
  • BC: 7,200 tons

The company now expects a harvest volume of 87,000 tonnes in 2022, up from the previously forecast level of 90,000 tonnes. Estimated harvest volume in Finnmark was reduced by 2,000 tonnes to 36,000 tonnes as harvesting was accelerated to take advantage of a strong market and slightly lower growth offshore during the quarter due to lower temperatures. Estimated catch volume in BC was reduced by 1,000 tons to 21,000 tons due to accelerated harvesting of fish due to the risk of premature maturation. Of the total harvest volumes for 2022, Grieg Seafood expects to sell around 5-10% as VAP products.

result presentation
CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results live today at 9:00 a.m. CEST at the Hotel Continental.

The presentation is available at https://investor.griegseafood.com/reports-&-presentations#quarterly or at the following link: https://channel.royalcast.com/landingpage/hegnarmedia/20220823_2/

The presentations and the subsequent Q&A will be held in Norwegian. An English transcript of the presentations will be made available at https://investor.griegseafood.com/reports-&-presentations#quarterly.

For further inquiries please contact:
Andreas Kvame, Managing Director
Mobile: +47 907 71 441

Atle Harald Sandtorv, Chief Financial Officer
Mobile +47 908 45 252

About Grieg Seafood
Grieg Seafood ASA is one of the world’s leading salmon farmers. Our farms are located in Finnmark and Rogaland in Norway, and in British Columbia and Newfoundland in Canada. Our head office is in Bergen, Norway. Grieg Seafood ASA was listed on the Oslo Stock Exchange in June 2007. More than 750 employees work in our regions in the company.

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Sustainable farming practices are the foundation of Grieg Seafood’s operations. Minimizing environmental impact and maximizing fish welfare is both an ethical responsibility and the driver of economic viability. By 2026, we are targeting global growth, cost improvements and transition from a pure salmon supplier to an innovation partner for select customers.

To find out more, please visit www.griegseafood.com

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

  • GSF Q2 2022 Quarterly Report

  • Quarterly presentation GSF Q2 2022

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