Grieg Seafood releases third quarter 2020 results and presents plan for enhanced value creation

Nachrichtenquelle: globenewswire
17.11.2020, 06:00  |  169   |   |   

Today, Grieg Seafood ASA releases its report for the third quarter 2020. At the same time, the company presents an update on its ambitions, strategy and priorities in a capital markets update.

Third quarter highlights

  • Harvest volume of 21 201 tonnes (21 028 tonnes in Q3 2019)
  • Negative EBIT before fair value adjustment of NOK 192 million (+143 million)
  • Negative EBIT/kg of NOK 9.0 (+6.8)
  • Disrupted markets with low spot prices had a negative impact by NOK 92 million on earnings in the quarter compared to corresponding quarter in 2019
  • Good performance in Rogaland and Finnmark, total EBIT/kg NOK 9.9 (11.2)
  • Shetland profitability negatively impacted by NOK 150 million from Skye and Grieg Seafood decided to cease its operations on Isle of Skye

Commenting on the company’s performance in Q3, CEO Andreas Kvame, said:

“The third quarter was challenging for Grieg Seafood. Effects of the Covid-19 impacted price achievements negatively in all markets and we experienced operational challenges out of the ordinary on Isle of Skye. On the other hand, our Norwegian regions delivered good results in the quarter. Progress is made at our recently acquired greenfield project in Newfoundland, and healthy fish are growing in our new hatchery. However, to lower risk in the initial phase of the project, we have decided to defer the construction of the first post-smolt unit to 2023, without causing delay to our target of harvesting 15 000 tonnes in 2025.”

Capital markets update: Value creation through improvement and growth

“In 2020, we have not been able to deliver on our ambitions. Grieg Seafood has a clear goal of creating value and we are taking decisive action and implementing measures to improve our performance the coming years. We will reduce cost per unit in all regions supported by cost effective and sustainable farming methods and profitably grow our salmon production by around 45% towards 2025”, commented CEO Andreas Kvame.

The highlights from the presentation

  • Focus on high potential regions of Norway and Canada. Initiative to divest Shetland assets
  • Targeting average farming cost below NOK 40/kg in Norway and below CAD 7/kg in British Columbia, which is 10-15% below current levels
  • Introduce cost and efficiency measures in the areas of smolt infrastructure development, improve fish health and welfare, focus on preventative farming practices and execute value chain repositioning
  • Targeting production of 100 000 tonnes in 2022 and 130 000 tonnes in 2025. Adjusting for the initiated divestment of the Shetland assets, this corresponds with the previously announced ambition to produce 150 000 tonnes in 2025. The production target of 90 000 tonnes in 2020 is maintained
  • Total investments next five years to reach 130 000 tonnes in 2025 is estimated to be NOK 2,6 billion (excluding biomass and maintenance) 
  • Grieg Seafood shall maintain sufficient financial capacity to execute the growth strategy. The company presents a solid projected cash generation in the medium- to high-price scenarios and even in a low-price scenario of NOK 50 per kg the next five years, the growth investments are projected to be funded
  • In the short term, the company is pursuing three potential sources of capital
    • Extending a current bridge loan to after a divestment of Shetland assets
    • Continue a dialog with GIEK on financing of the Newfoundland project
    • Following the successful issue of a Green bond in June, Grieg Seafood intends to actively utilize the bond market
  • Grieg Seafood reiterates its goal to provide a competitive dividend pay-out over time

Presentation

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Grieg Seafood releases third quarter 2020 results and presents plan for enhanced value creation Today, Grieg Seafood ASA releases its report for the third quarter 2020. At the same time, the company presents an update on its ambitions, strategy and priorities in a capital markets update. Third quarter highlights Harvest volume of 21 201 …

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