Grieg Seafood ASA: Q1 2018 - Good biology, supporting further growth
May 14 2018 - 11:00PM
Highlights - Q1 2018
-
Solid production in Finnmark, BC and UK
-
Production in Rogaland negatively impacted by
low sea temperatures and PD
-
Higher fixed cost/kg due to lower harvest
volumes
-
Spot prices increased throughout Q1 2018
-
EBIT/kg NOK 14.18
-
Harvest guiding 2018 of 80,000 tons maintained,
up 28 % from 2017
-
Proposed dividend of NOK 2.00 per share
Results Q1 2018
Grieg Seafood harvested 11,433 tons in Q1 2018, up 34 % compared to
8,522 tons harvested in Q1 2017. The average spot price was down
NOK 5.36 per kg compared to the same period last year. For Grieg
Seafood the price achieved was only down by NOK 2.70 per kg. This
is mainly due to high harvest volumes towards the end of the
quarter, when the spot price was at its highest.
The resulting operating revenues for the first quarter 2018 was NOK
1,493 million, a 5 % increase compared to Q1 2017.
Operating costs/kg were down by NOK 1.00 in the quarter, mainly as
a result of higher harvest volumes in addition to a more stable
biological situation. The lower costs combined with strong price
achievement in the quarter resulted in an EBIT/kg of NOK 14.20,
down compared to NOK 15.40/kg in Q1 2017.
The company's EBIT (operating income) before fair value adjustments
were NOK 162.1 million in Q1 2018, up from NOK 131.5 million in Q1
2017.
Strategic
priorities
Grieg Seafood's overall goal is to maintain an annual production
growth of minimum 10 % until 2020. Furthermore, the company aims to
keep production costs at- or below the industry average.
Continued access to high-quality smolt is critical to ensure growth
going forward. In addition, larger smolt will result in shorter
production time at sea, thus contributing to reduced biological
risk and increased survival. Another pivotal aspect of Grieg
Seafood's growth strategy is the increased utilization of the
company's licenses. High site flexibility is essential to improve
utilization, and Grieg Seafood cooperates with local authorities on
an ongoing basis to optimize flexibility.
Increased volumes, improved capacity utilization and shorter
production time at sea will contribute to higher efficiency and
reduced production costs. The company also continually undertakes
cost reducing initiatives and has established an internal
improvement program, which scheduled to run until 2020.
Market developments
Salmon prices increased in Q1 2018 compared to Q4 2017.
Year-to-date, the supply of salmon has been lower than previously
expected, which can partly be explained by the lower-than-normal
sea temperatures in Norway. The spot price increase in the quarter
points to a continued strong demand for salmon.
The Group's total share of fixed price contracts in Norway was 46 %
in Q1 2018. The high contract share was mainly due to the low
harvest volume in the period. For Q2 2018, the estimated share of
fixed price contracts is 27 %. For 2018 as a whole, the company
expects a fixed price contract share of approximately 28 %.
Outlook
Low global production has led to increased spot priced throughout
Q1 2018. The relationship between supply and demand is expected to
stabilize in the longer term, which will likely give grounds
stable, strong market prices in the future.
GSF expects to harvest approx. 21,400 tons in Q2 2018. For 2018 as
a whole, the company expects to harvest approximately 80,000 tons,
which corresponds to a 28 % increase over 2017.
Please find enclosed the
company's Q1 2018 report and presentation.
For further information, please
contact:
- CEO Andreas Kvame (cell phone: +47 907 71 441)
- CFO Atle Harald Sandtorv (cell phone: +47 908 45 252)
This information is subject to
the disclosure requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.
GSF Q1 2018 Report ENG
GSF Q1 2018 Presentation ENG
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Grieg Seafood ASA via Globenewswire
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