Grieg Seafood ASA: 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.
While it has been a tough quarter, a lot of good work has been
done to get back in shape. I want to thank all of my hard-working
colleagues for their efforts.”
Harvest volume in Rogaland was 4,783 tonnes in the quarter
(6,841). Farming cost increased compared to Q2 2023 mainly due to
the low harvest volume and ISA-related harvesting. At quarter end,
there were no sites with ISA. Grieg Seafood has initiated a
vaccination program against ISA for all smolt release to sea, and
completed additional measures at its smolt facilities, which is
expected to reduce risk related to ISA significantly going forward.
Operational EBIT/kg ended at NOK 0.7 for the quarter (13.4),
impacted by the low harvest volume in addition to reduced average
harvest weight compared to Q3 2022 due to early harvest. Due to the
early harvest of ISA-infected fish in the quarter, the full year
2023 harvest target for Rogaland is reduced from 27,000 to 26,000
tonnes.
In Finnmark, harvest volume was 1,354 tonnes in the quarter
(8,174). We did not plan to harvest during Q3, however we
prioritized earlier harvest to maintain fish welfare related to
Spiro. Water treatment equipment have been installed and
disinfection measures have been implemented to significantly reduce
future risks of Spiro entering the freshwater facility. We have not
had any new detections of Spiro at the freshwater facility in 2023.
The new generation of smolt transferred to sea in 2023 is in good
health and is performing well. Farming cost increased from last
quarter mainly due to low harvest volume at lower weights.
Operational EBIT/kg for the quarter ended at NOK -27.1 (14.0),
impacted by the low harvest volume, low superior share and low
average harvest weight. Unfortunately, earlier harvest to maintain
fish welfare has also occurred in Q4. Therefore, the full year 2023
harvest estimate is lifted from 26,000 to 27,000 tonnes.
In BC, harvest volume was 6,108 tonnes in the quarter (7,908).
The seawater performance was impacted by seasonal challenges
including high sea lice pressure necessitating treatments and
events of low dissolved oxygen, however the situation improved
towards the end of the quarter. The survival rate remained stable
from last quarter, however these events impacted farming costs,
resulting in negative results for the BC operations during the
quarter.
In Newfoundland, both freshwater and seawater production was
good during the quarter. High smolt quality combined with favorable
biological conditions contributed to good fish health and survival
high. During the quarter, Newfoundland completed the smolt
transfer to sea this year, which totals 2.5 million smolt with an
average weight of 140 grams. The 12 month rolling survival rate as
of quarter end was 96%, with good growth at sea, and no sea lice
issues. At the end of Q3 2023, we had approximately 9 300
tonnes biomass at sea with an average weight of 2.0 kg. The average
weight of the fish transferred to sea in 2022 was 4.1 kg at the end
of the quarter. We started harvesting in October, with excellent
results. Total harvest for the year is estimated to 5,000
tonnes.
Outlook
Global harvest of Atlantic salmon in 2023 is expected to be
slightly reduced compared to 2022. With expectations of no growth
in global harvest in 2023, combined with an outlook for continuing
strong demand fueled by an increased focus on healthy food and
sustainably produced proteins, we currently expect sustained strong
market for the remainder of 2023.
Grieg Seafood generally targets an annual contract share of
20-50%. Estimated contract share for the Norwegian operations in Q4
2023 is 15% and 15% for the full year 2023.
In Q4 2023, expected harvest volume is 25,800 tonnes,
distributed as follows:
- Rogaland: 2,200 tonnes
- Finnmark: 12,200 tonnes
- BC: 6,400 tonnes
- Newfoundland: 5,000 tonnes
Grieg Seafood guides for a total harvest volume of 76,000 tonnes
in 2023, down from previously guided 78,000 tonnes:
- Rogaland: 26,000 tonnes
- Finnmark: 27,000 tonnes
- BC: 18,000 tonnes
- Newfoundland: 5,000 tonnes
Results presentation
Grieg Seafood ASA releases its third quarter 2023 report today
at 6:00 a.m. CET. At 8:00 a.m. CET, CEO Andreas Kvame and CFO Atle
Harald Sandtorv will present the results live at Hotel Continental,
Stortingsgaten 24/26, Oslo.
Following the presentation, it will be opened up for questions
from the audience. The presentation and the subsequent Q&A will
be held in Norwegian.
A live webcast from the presentation can be accessed
at www.investor.griegseafood.com or with the following
link: https://channel.royalcast.com/landingpage/hegnarmedia/20231114_3/
Webcast participants need to register to post questions. A
recording of the webcast and an English transcript of the
webcast will be made available on the company’s website.
For further enquiries, please contact:Andreas Kvame, CEOCell
phone: +47 907 71 441Atle Harald Sandtorv, CFOCell phone: +47 908
45 252
For media enquiries, please contact:Kristina Furnes, Chief
Communications OfficerCell phone: +47 48185505 /
kristina.furnes@griegseafood.com
About Grieg Seafood
Grieg Seafood ASA is one of the world's leading
salmon farmers. Our farms are in Rogaland and Finnmark in Norway,
as well as in British Columbia and Newfoundland in Canada. Our
headquarter is in Bergen, Norway. Grieg Seafood ASA was listed at
the Oslo Stock Exchange in June 2007.
Sustainable farming practices are the foundation
of Grieg Seafood's operations. The lowest possible environmental
impact and the best possible fish welfare is both an ethical
responsibility and drive economic profitability. To learn more,
please visit www.griegseafood.com.
This information is subject to the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities Trading
Act.
- 2023 Q3 GSF quarterly report
- 2023 Q3 GSF quarterly presentation
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