Lerøy Seafood Group ASA

Q1 2020 Results - Seite 2

LNWS’s primary business is processing wild-caught whitefish. The company has use of 12 processing and purchasing plants in Norway, five of which are leased from Lerøy Havfisk. The processing of whitefish in Norway has been extremely challenging for many years. As a result of high demand for seafood and lower quotas, the raw material prices increased throughout 2019 and early 2020. In the short term, this always represents a challenge for processing operations.

In total, the segment contributed EBIT of NOK 270 million in Q1 2020, compared with NOK 171 million in the same period of 2019.

• “In the Wild Catch segment, good catch efficiency, increased volume and higher prices have resulted in good earnings for the trawler fleet in the first quarter,” confirms CEO Henning Beltestad. “The new trawler,  ‘Kongsfjord’, delivered in February this year, has already proven its high catch efficiency, and we are particularly pleased to note the apparent success of our investments made to improve catch quality,” says Henning Beltestad. “The high prices for raw materials in the quarter remain a challenge for earnings from onshore operations, but we have witnessed how the investments we have made in recent years have generated significant improvements in the Group's product range and position on global seafood markets,” confirms CEO Henning Beltestad.

THE FARMING SEGMENT

The Farming segment reported operating profit before fair value adjustment related to biological assets of NOK 562 million in Q1 2020, compared with NOK 510 million in Q1 2019. During the quarter, the Farming segment harvested 39,000 tonnes, compared with 32,000 tonnes in Q1 2019.

In Q1 2020, EBIT/kg was NOK 16.60 for Lerøy Aurora, NOK 18.40 for Lerøy Midt and NOK 9.40 for Lerøy Sjøtroll. In total, EBIT/kg for the segment was down from NOK 15.80 in Q1 2019 to NOK 14.30 in Q1 2020.

• “At the start of the first quarter, the spot prices for salmon were high. These fell during the quarter, partly due to the impact on demand relating to the restrictions laid down to control the Covid-19 pandemic. What's more, prices realised were negatively affected by an abnormal high  shar of winter ulcers on fish,” explains CEO Henning Beltestad.
• “The Group reported higher release from stock costs in Q1 2020 when compared with the same period last year, but expects to see a fall in these costs in the second half of 2020,” confirms Henning Beltestad.   

THE VAP, SALES & DISTRIBUTION SEGMENT (VAPS&D)