Grieg Seafood ASA Operational and financial update
Grieg Seafood ASA (“Grieg Seafood” or “the company”) will release the full report for the third quarter 2020 report on 17 November. Ahead of the report, the company hereby provides an operational and financial update. The numbers are estimates, and final numbers will be presented at Q3.
- EBIT before fair value adjustment for the third quarter 2020 of NOK -187 million (154) due to lower spot prices, higher costs in British Columbia (BC) and NOK 150 million directly related to the discontinued operations on the Isle of Skye.
- Postponing parts of Newfoundland project due to market uncertainty and lower visibility following Covid 19
- Expect total harvest volume of 90,000 tonnes in 2020. Transferring harvest of 5,000 tonnes to 2021 to optimize harvest weight and time to market
- The new reporting date for third quarter 2020 is 17 November, changed from 4 November as originally planned
Third quarter 2020
Grieg Seafood harvested 21,200 tonnes GWT in the third quarter, in line with guiding of 21,400 tonnes. In the third quarter 2019, total harvest was 21,000 tonnes.
Following market turbulence and demand shift from hotels, restaurants and catering (horeca) to retail due to Covid-19, market prices in the quarter were down compared with Q3 2019. In addition, prices achieved in Shetland were negatively impacted by advanced harvesting at Skye resulting in lower harvest weight. Prices achieved in Finnmark and Rogaland were good in the quarter.
Farming cost in the quarter is negatively impacted by the low harvest weights in Skye, in addition to increased costs from handling of biological challenges in both Shetland and BC.
As announced on 18 September, Grieg Seafood has decided to discontinue its operations on the Isle of Skye in Scotland, with immediate liquidation of parts of the operations. Previously communicated write-down of biomass due to mortalities, combined with low price achievements on fish harvested and high production and other shut-down costs will impact EBIT for the third quarter negatively by approximately NOK 150 million.
EBIT before fair value adjustment of biological assets is estimated to NOK -187 million in the quarter, compared with NOK 154 million in the third quarter of 2019.
Total harvest volume for the first nine months of 2020 was 63,472 tonnes. For the fourth quarter, the company expects to harvest 26,500 tonnes, bringing total volume for 2020 to around 90,000 tonnes. This is a reduction of 5,000 tonnes from previous estimate and is manly related to transfer of harvest volume to 2021. By utilizing acquired MTB capacity, Grieg Seafood aims to optimize harvest weight and timing to market.