Lerøy Seafood Group ASA

Q3 2020 Results

RESULTS THIRD QUARTER AND YEAR TO DATE 2020

In Q3 2020, Lerøy Seafood Group (LSG) reported revenue of NOK 4,773 million, compared with NOK 5,102 million in the same period in 2019. Operating profit before fair value adjustment related to biological assets was NOK 370 million in Q3 2020, compared with NOK 501 million in Q3 2019. The most significant factor behind the lower earnings is the challenges on the whitefish market resulting from the COVID-19 pandemic, and the change in catch composition compared with Q3 2019.

The Group reports revenue of NOK 14,790 million for the first three quarters of 2020, compared with NOK 15,188 million in the same period of 2019. Operating profit before fair value adjustment related to biological assets for the first three quarters of 2020 was NOK 1,508 million, compared with NOK 1,965 million for the same period last year. The profit before tax and fair value adjustment related to biological assets for the first three quarters of 2020 was NOK 1,397 million, compared with NOK 1,966 million for the same period last year.

“The restrictions introduced to combat the COVID-19 pandemic continue to impact demand for seafood. In the third quarter, the restrictions have had a particularly negative impact on earnings for the whitefish segment. We have no way of knowing how long we will be affected by the pandemic, but we are experiencing that the Group’s model of close integration with the end consumer has grown even stronger throughout this period. In the long term, we also believe that demand for healthy, good and sustainable seafood will not change and will experience growth,” says CEO Henning Beltestad.

“One main target also in Q3 has been to keep the value chain open and ensure deliveries to our customers. We have succeeded in this. I would like to thank all my colleagues for their hard work in a challenging time.”

“2021 is just around the corner, and this is a year when we expect to see the initial effects of our substantial investments in smolt and other improvement measures,” explains CEO Beltestad. “Currently, developments are mainly moving ahead according to schedule, and we expect to see considerable growth in the harvest volume for redfish in 2021.”

THE WILD CATCH SEGMENT

The wholly owned subsidiary Lerøy Havfisk’s primary business is wild catches of whitefish. As described in the interim report for Q2 2020, restrictions introduced due to the COVID-19 pandemic have had a very negative impact on demand for whitefish species and have resulted in a challenging market for shrimp. There have been signs of market improvements in the third quarter of 2020, but this has still been a difficult quarter with falling prices and lower catch rates compared with Q3 2019.