“An unusually strong market”: High volumes and a strong currency fail to dent increasing salmon prices

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Grieg Seafood chief Andreas Kvame is surprised by the strong salmon market in the third quarter.

“The prices achieved in the third quarter give a large degree of optimism in relation to the next quarters,” Kvame told TDN Direkt on Wednesday.

At the same time, he said that Grieg Seafood may see somewhat increased costs in the short to medium term as a result of increased costs on raw material prices. Not least, he mentions an imbalance in the logistics and transport industry.

Compensate
“There are certain things we can do to compensate for the cost pressure. There is a quarterly price adjustment for feed and we can of course secure currency, so there are instruments, but there is a limit to what we can do with the logistics,” he explained.

Grieg Seafood achieved an operating EBIT of NOK 149 million (€15 million) in the third quarter. This was far ahead of the investment banks’ estimate of NOK 109 million (€11 million). High price achievement in British Columbia and falling cost levels were the drivers behind the results. In the wake of the presentation of the results, the company’s share price shot up by 7.2 per cent, to NOK 96.90, This is the highest level since August last year.

Grieg Seafood is predicting a harvest volume in 2022 of 90,000 tonnes.

“Both the biomass and the number of individuals are significantly higher than it was at the same time last year. Volume is an estimate, it can be 88,000 and it can be 92,000, but 90,000 is what we plan to slaughter now, he said.

Grieg Seafood Finnmark. Photo: Helge Hansen

Trend
Sparebank 1 Markets describes the report as marginally positive and points to good price achievement in Canada as the main reason for the better-than-expected figures.

“While the short-term outlook for costs is somewhat disappointing, the overall trend is that costs are expected to fall in the fourth quarter. We do not expect major cost improvements to be included in the share price at current levels “, wrote fish farming analyst Knut-Ivar Bakken in an update.

Fearnley Securities analyst Nils Thommessen considers the report neutral and will make minor changes, but as the key figures were better than expected, he expects a positive price reaction today.