Q3 2023 results

Highlights

• Biological on-off events have impacted production and results. Action taken to reduce biological risks
• Low harvest volume in the quarter to focus on rebuilding biomass
• Milestone reached in Newfoundland, where we in October conducted our very first harvest
• Expansion of post-smolt in Finnmark to accelerate post-smolt strategy
• 78% of the harvested volume in the quarter ASC certified
• Expect harvest of 25,800 tonnes in Q4 2023. Total volume of 76,000 tonnes in 2023, increasing to 85,000 tonnes in 2024

Financial results

Operational EBIT for Grieg Seafood was NOK -86 million in the third quarter of 2023,

compared to NOK 145 million in the corresponding period last year. Harvest volume was 12,245 tonnes in the period (22,923), which gives an operational EBIT per kg of NOK -7.0 (6.3).

Commenting on the quarter, Andreas Kvame, CEO of Grieg Seafood ASA said:

“During the third quarter, Grieg Seafood’s main priority was to let the fish grow and build biomass. As a result, harvest volumes were low, causing increased costs per kilo. The operational performance was impacted by a mixture of different biological challenges, including Spiro in Finnmark, harvesting at low weights due to previous ISA outbreaks in Rogaland and seasonal biological issues in British Columbia. Unfortunately, these events reduced our price achievement and earnings.

I am not satisfied with the results. We are turning every stone in the regions to get back on track. Mitigating measures have been implemented, such as vaccination programs against ISA and winter ulcers as well as a UV filter to prevent Spiro from entering our smolt facility. Due to the long production cycle of the salmon, it takes some time before we see the effect of the measures. I am encouraged that the underlying biology in Rogaland is good. In Finnmark, the generation of fish transferred to the ocean during 2023 has not been impacted by Spiro and is performing well.

The development in Newfoundland was the high point of the quarter, with commenced first harvest in October. Biological control has been strong, with high survival, good fish health and welfare, good growth, good product quality and no sea lice issues. We look forward to taking the next steps in Newfoundland.

In addition to short-term measures to improve biology, Grieg Seafood are also taking steps towards our ambitions of sustainable growth in the medium to long term. We are investing NOK 1.1 billion in a 3,000 tonnes post-smolt expansion in Finnmark, to advance biological control, fish health and welfare and sustainability. In Canada, we see huge opportunities for sustainable salmon farming in close proximity to the growing North American market. We aim to realize the Canadian potential. However, developing the Canadian operations require substantial investments at a time when the resource tax and overall inflation require greater capital discipline. As such, we are seeking long-term partners to invest with us, allowing us to develop our business in Canada at pace.