Grieg Seafood ASA: Q1 2024 results
Highlights
- Harvest volume of 21,075 tonnes (15,357 tonnes)
- Operational EBIT in the quarter of NOK 292 million
(NOK 385 million), with operational EBIT/kg of NOK 13.8
(25.1)
- Rogaland delivered second best quarterly results ever
- Results in Finnmark significantly impacted by historical
biological challenges and downgrades
- Successful completion of harvest of the first generation in
Newfoundland, with high share of superior quality
- Construction of post-smolt facilities in Rogaland, Finnmark and
Newfoundland on track
- Process to identify long-term partners to take part in the
development of Canadian operations is ongoing
- 65% of the harvested volume in the quarter ASC certified
- Expect to harvest 17,100 tonnes in Q2 2024
- Target harvest volume for the full year 2024 remains at 81,000
tonnes
Financial results
Operational EBIT for Grieg Seafood was NOK 292 million in
the first quarter of 2024, compared to NOK 385 million in the
corresponding period in 2023. Harvest volume was 21,075 tonnes
during the period (15,357), which gives an operational EBIT per kg
of NOK 13.8 (25.1).
In Rogaland, harvest volume for the quarter was 9,426 tonnes
(7,502), 2,500 tonnes above guiding for Q1 2024 due to advanced
harvesting to mitigate biological risk. Supported by high average
weight driven by post-smolt, Rogaland delivered second best
quarterly results ever caused by lower costs and strong price
achievement. For the quarter, Operating EBIT/kg ended at
NOK 39.4 (38.4), confirming a continued positive operational
development in the region.
In Finnmark, harvest volume for the quarter ended at 5,663
tonnes (7,856). Results were significantly impacted by low average
harvest weights and reduced quality, with Operational EBIT/kg
ending at NOK 3.1 (20.1). Biological performance in sea during
the quarter has been impacted by a mix of Spiro (Spironucleus
salmonicida), string jellyfish and low seawater temperatures.
Measures have been taken to improve fish welfare, expecting effect
in 2024 and significant improvements for the next winter.
British Columbia had a limited harvest volume of 666 tonnes in
the quarter, as the region has prioritized biomass growth.
Operational EBIT/kg ended at NOK 0.3. The underlying seawater
performance was good during the quarter, with a 12-month survival
rate of 93%.
In Newfoundland, the company has successfully completed the
harvesting of the first generation in the quarter. Total harvest
volume during the quarter was 5,320 tonnes, while the total harvest
volume for the entire generation was approximately 8,500 tonnes.
Realized price was NOK 85.0 per kg and the superior share was
98%.
Increased financial flexibility to move forward with
post-smolt in Newfoundland
Grieg Seafood ASA and its lenders under its existing Facilities
Agreement have signed an amendment letter by which two accordion
facilities will be added to the existing facilities. The accordion
facilities are consisting of a term loan facility over NOK 500
million and a revolving facility over NOK 500 million. The
accordion facilities will increase Grieg Seafood's financial
flexibility to support growth initiatives.
One of the growth initiatives is that Grieg
Seafood envisages to move forward with the construction of the
post-smolt facility in Newfoundland. Grieg Seafood has reached a
material agreement with its main suppliers for the remaining
construction work and is focusing on getting the last details in
place. Completion of the post smolt facility is expected in the
first half of 2026 and will require a CAPEX of approximately CAD
115 million, distributed by 40%, 40% and 20% over the 2024-26
period.
Commenting on the quarter, Andreas Kvame, CEO of Grieg Seafood
ASA said:
“During the first quarter of 2024, we experienced progress after
a challenging 2023. The main driver of the improvement was a strong
biological performance in Rogaland, which reduced costs and
increased price achievement. The underlying biology is improving in
all of our farming regions. I want to thank my colleagues in all
parts of the company for their efforts and hard work during this
quarter.
Our Finnmark operations were affected by historical biological
challenges, including the Spiro parasite and string jelly fish.
Coupled with low seawater temperatures, the challenges impacted
survival, fish health, welfare and quality. I am not satisfied with
the fish welfare situation during the quarter. We have and continue
to implement a variety of improvement measures, including a new
vaccine against winter ulcers, a UV filter against Spiro and sea
lice treatment capacity with improved welfare. We are also making
changes to our production planning and reducing biological risk as
our post-smolt strategy is gradually rolled out in our regions.
Because of the long production cycles, it takes time to see the
results of our measures. During 2024 and especially next winter,
however, we expect significant improvements.
In Canada, we accomplished a significant
milestone with the completion of our first harvest in Newfoundland.
We have proven that it is possible to farm salmon with good
welfare, low impact and high quality in Placentia Bay. This is
strengthening our faith in Newfoundland as a future, robust farming
region, which will generate jobs and shared value to the
surrounding rural communities.
During the quarter, we also announced that we
are establishing a 10,000 tonnes value-added processing plant,
which will facilitate both of our Norwegian regions. This is a key
step towards delivering on our downstream strategy, where we aim to
work closer with our customers and increase value creation from our
fish.”
Outlook
The global harvest of Atlantic salmon in 2024 is
expected to increase by 1%. With expectations of limited supply
growth in 2024, combined with an outlook for continuing strong
demand fueled by an increased focus on healthy food and sustainably
produced proteins, we expect a sustained strong market.
Estimated contract share for the Norwegian
operations is 11% for Q2 2024 and 7% for the full year 2024.
In the second quarter of 2024, expected harvest volume is 17,100
tonnes, distributed as follows:
- Rogaland: 3,600 tonnes
- Finnmark: 3,500 tonnes
- BC: 10,000 tonnes
- NL: 0 tonnes
The company guides for a harvest volume of
81,000 tonnes in 2024, distributed as follows:
- Rogaland: 28,000 tonnes
- Finnmark: 27,000 tonnes
- BC: 15,000 tonnes
- NL: 11,000 tonnes
Results presentation
Chief Executive Officer (CEO), Andreas Kvame and
Chief Financial Officer (CFO) Atle Harald Sandtorv will present the
results live at Hotel Continental, Stortingsgata 24/26, Oslo
today at 8:00 a.m. CEST
Following the presentation, it will be opened
for questions from the audience. The presentation and the
subsequent Q&A will be held in Norwegian language.
A live webcast from the presentation can be
accessed
at https://investor.griegseafood.com/reports-&-presentations#quarterly
or with the following
link:https://channel.royalcast.com/landingpage/hegnarmedia/20240516_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
Atle Harald Sandtorv, CFOCell 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,
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
The information included in this announcement is defined as
inside information pursuant to article 7 of the Market Abuse
Regulation and is publicly disclosed in accordance with article 17
of the Market Abuse Regulation and section 5-12 of the Norwegian
Securities Trading Act.The stock exchange announcement was
published by May Hansen, Executive administrative secretary, Grieg
Seafood ASA, on 16 May 2024 at 6:00 a.m. CEST.
- 2024 Q1 GSF quarterly report
- 2024 Q1 GSF quarterly presentation
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