Changes to harvest plans dampen Lerøy result

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Lerøy Seafood Group achieved an operating profit of €58 million in the third quarter.

“We will increase our turnover in the third quarter of 2021 by 33 per cent from the same period last year, driven by increased activity and increased prices. We have the highest turnover, and the highest harvest volume in any quarter of our history. The demand for seafood is generally very strong, and this provides fertile ground for optimism for the future prospects of the industry,” said CEO Henning Beltestad.

“At the same time, earnings in the third quarter were weaker than we expected at the beginning of the quarter. In the last part of the quarter, we had to make some changes to slaughter plans, which resulted in withdrawals at lower weights than planned. This has a negative impact on both price achievement and cost. In addition, we underestimated export volumes from Norway, especially in September,” Beltestad continued.

Below expectations
An operating profit of NOK 667 million (€67 million) was expected in advance, according to estimates obtained by Infront for TDN Direkt.

In the third quarter, Lerøy Aurora delivered an EBIT per kg of NOK 9.3, Lerøy Midt of NOK 9.0 and Lerøy Sjøtroll of NOK 4.0. In total, EBIT per kg in the segment increased from NOK 7.0 in the third quarter of 2020 to NOK 7.6 in the third quarter of 2021.

Demand for seafood in the grocery market continues to be strong. At the same time, the company has seen a positive development in the HoReCa market as a result of restrictions related to the Covid-19 pandemic being gradually lifted.

“We are experiencing a positive underlying development in our downstream businesses, where increased capacity utilization is driving increased earnings. We still have start-up costs in new business with potential for further increase in activity and earnings in the coming years,” said Beltestad and refers to the company’s two new processing plants in Italy and Spain.

Postponed
Lerøy has recently developed a project at Årskog in Fitjar for further development of large smolts. Based on several factors, including Covid-19 and associated consequences, the group has decided to postpone the final decision on initiation.

The company estimates a harvest volume in 2021 of 204,000 tonnes (gutted weight) of salmon and trout.

For consolidated operations, Lerøy Seafood Group currently expects to harvest 190,000 tonnes in 2022. The group’s share from associated companies is expected to be 16,500 tonnes. This does not include the increased share from associated companies that will be dependent on the final approval of Scottish Sea Farms’ acquisition of Grieg Seafood Hjaltland. The expectation for a total harvest volume in 2022 will therefore be in the order of 207,000 tonnes.