With EBIT per kilo of minus NOK 13.93 (GBP 1.23) in the quarter, Shetland remains an unsolved problem for Grieg Seafood.
While the Norwegian parts of the company delivered solid numbers, Grieg still struggles to make money from Shetland. Of the Norwegian companies on the Oslo Stock Exchange, only SalMar and Norway Royal Salmon have not yet submitted their quarterly figures. And while we wait for them, Grieg and CEO Andreas Kvame can celebrate that they are currently the best in the class in Norway.
Seafood analyst Alexander Aukner in DNB believes it was a good report from Grieg, but that Shetland is the obvious black sheep in the family.
“We probably have to be patient with Shetland before that division delivers stable good results,” said Aukner to SalmonBusiness.
Have made some mistakes
During Wednesday’s quarterly presentation at Hotel Continental, CEO Grieg, Andreas Kvame, admitted that a number of mistakes have been made in Shetland.
“We have had some problems, but we will focus more on post-smolt and make more investments in the division going forward. It hasn’t been enough,” said Kvame.
Grieg reports that the problems will continue in the second quarter, but that the diet will be somewhat down in the quarter due to increased harvest volume. For the year as a whole, Grieg guides 12,000 tonnes of harvested fish in Shetland.
“We see light in the tunnel now. When we get to the second half of the year, we hope to finish the problems we have had,” said Kvame.
Sparebank1 Markets’ salmon analyst Tore A. Tønseth believes it is “bullish” that Grieg maintains the harvesting target of 100,000 tonnes next year, which means a long jump from this year’s 82,000 tonnes.
Aukner believes it is exciting that the management of the company, during the quarterly presentation, seemed certain to reach its 2020 target.
“It was exciting to hear the results from the large-scale investment in Rogaland, and that the management seems so secure in reaching its 2020 target of 100,000 tonnes,” he said.
In the report, Grieg writes that they estimate 26 and 28 million smolt is planned stocked for 2019 and that they will reach the goal of 100,000 tonnes harvest in 2020 that is on target or below the average for the industry.