Grieg Seafood ASA

Q4 2020 results – Disrupted markets with low spot prices impacted earnings

Fourth quarter highlights

• Harvest volume of 20 271 tonnes in fourth quarter and 71 142 tonnes for the full year, below guidance of 75 000 tonnes (ex Shetland) due to ISA harvest capacity challenges in Finnmark
• Good biological performance in Rogaland and BC
• Finnmark impacted by high cost related to continued harvest of ISA sites
• Negative EBIT before fair value adjustment of NOK 17 million
• Negative EBIT/kg NOK 0.8
• Disrupted markets with low spot prices impacted earnings negatively by NOK 107 million vs Q4 2019
• Process to divest Shetland assets initiated. Shetland classified as held for sale and not included in EBIT
• Additional issue of NOK 500 million on the Green Bond
• In historic move, soy vendors to the salmon industry became the first Brazilian soy suppliers to end trade of deforestation linked soy
• Expect harvest of 80 000 tonnes (ex Shetland) in 2021

Subsequent event

• Fully integrated sales and marketing organization operational in January 2021
• Invested in Årdal Aqua in January 2021, a joint venture for post-smolt and land-based salmon farming

Covid-19

The Covid-19 pandemic has disrupted the salmon market with a significant shift in demand and lower prices in core markets. The priorities for Grieg Seafood are protecting our people, the local communities where we operate, our partners and business operations, and to secure liquidity and financial solidity. Despite the challenging circumstances, demand for Atlantic salmon remains strong and Grieg Seafood has been able to maintain efficient operations throughout the quarter.

Financial results

The Group harvested 20 271 tonnes in Q4 2020, down 12% compared to 23 010 tonnes in Q4 2019.

The average spot salmon price (NQSALMON, weekly average less distributor margin) for Q4 2020 was NOK 43.2 per kg, down by NOK 13.4 per kg compared to Q4 2019, and down by NOK 3.9 per kg compared to Q3 2020.

Sales revenues in Q4 2020 from continuing operations amounted to NOK 1 163 million, a decrease of 20% compared to Q4 2019. The decrease is mainly due to the lower spot prices in Norway, resulting in a negative revenue contribution on EBIT of NOK 107 million when comparing average realized prices in the quarter to Q4 2019. However, the effect from BC impacted our EBIT positively by NOK 15 million. The negative effect from lower market prices were also somewhat offset by favourable fixed price contracts in Rogaland and Finnmark.