Grieg Seafood ASA

Q2 2021 EBIT of NOK 44 million

Second quarter highlights

• Harvest volume of 17 812 tonnes (20 140)
• EBIT before production fee and fair value adjustment of NOK 44 million (47 million), with EBIT/kg of NOK 2.4 (2.4)
  • Downgrades, low average harvest weight and harvest profile impacted price achievement in Finnmark by NOK -41 million
  • Operational cost in Newfoundland, including write down related to ISA, of NOK -45 million
  • Strong production and good price achievement in British Columbia
• Agreement to sell Shetland operations for GBP 164 million
  • Good performance in Shetland following restructuring and operational improvement, EBITDA of NOK 56 million (held for sale)
• Underlying operational improvement, expect lower costs towards year end and through 2022
• Integrated sales and market organization handling 100% of sold volume in the quarter
• Expect harvest ex Shetland of 21 700 tonnes in Q3 2021, and 80 000 tonnes for the full year 2021

 

Disposal of Shetland

Grieg Seafood has entered into a sales purchase agreement with Scottish Sea Farms for the sale of the Shetland operations for GBP 164 million. The transaction is expected to close within Q4 2021, depending on processing time with relevant competition authorities and some other customary closing conditions. The transaction will leave Grieg Seafood in a strong financial situation and provide room to engage in growth initiatives in Norway and Canada in line with the Group’s strategy.

Financial results

The Group harvested 17 812 tonnes ex. Shetland in Q2 2021, down 12% compared to 20 140 tonnes in Q2 2020.

The average spot salmon price (NQSALMON weekly average less distributor margin) for Q2 2021 was NOK 62.1 per kg, up by NOK 5.2 per kg compared to Q2 2020, and up by NOK 9.3 per kg compared to Q1 2021.

Sales revenues from continuing operations amounted to NOK 1 122 million, a decrease of 4% compared to Q2 2020. The price achievement in BC was strong, however, in Norway the price achievement was impacted by downgraded fish and fixed price contracts. In Finnmark, the price achievement was in addition impacted by low average harvest weight and harvest towards the end of the quarter with lower spot prices.

Compared to Q2 2020, the difference in price achievement, measured as sales revenue/kg, had a positive contribution to the EBIT by NOK 88 million. The lower harvest volume impacted the EBIT by NOK -10 million, while increases in operational costs, including Newfoundland, impacted the EBIT before production fee and fair value adjustment of biological assets by NOK -99 million compared to Q2 2020.