High price achievement gave increased profits for Grieg Seafood

News
0

Grieg Seafood achieved an operating EBIT of NOK 149 million (EUR 15.1 million) in the third quarter. This was far ahead of the brokerage houses’ estimates of NOK 109 million (EUR 11 million). High price achievement in British Columbia and falling cost levels were the drivers behind the result.

While the NASDAQ price was NOK 54.5 (EUR 5.5) in the third quarter, Grieg achieved a selling price of NOK 58.4 (EUR 5.9) per kilo. The price difference made a positive contribution to EBIT of NOK 113 million (EUR 11.4 million). The high price achievement was exclusively in Canada. In Norway, the company achieved lower prices than NASDAQ, mainly due to downgrades of fish, which were partially offset by positive contributions from fixed-price contracts.

In total, the company harvested 20,479 tonnes of salmon in the quarter. Turnover amounted to NOK 1,303 million (EUR 132 million).

In the quarterly report, Grieg reports strengthened operations, with increased survival rates, in all regions. The company expects lower costs towards next year. The production cost for the third quarter was NOK 48.7 per kilo (EUR 4.9).

The business in Shetland, which is formally held for sale, achieved an EBITDA of NOK 53 million (EUR .5.4 million). The British competition authorities are expected to decide whether there will be a transaction by 15 December.

During the quarter, Grieg established a focus on processing. As the first step towards a repositioning, the company signed a letter of intent to cooperate with Isfjord Norway. Through the collaboration, Grieg will process parts of its harvest volume at Isfjord Norway’s plant, and sell it through its own sales apparatus. This investment is expected to contribute to better price achievement for fish that would otherwise be downgraded.

The company expects a harvest volume, not including Shetland, of 77,000 tonnes for the whole of 2021 and 90,000 tonnes for 2022.