Grieg Seafood posted operating EBIT of NOK 1 million (EUR 0.09 million) in its latest trading update, well below consensus expectations of NOK 75 million (EUR 6.98 million) and Arctic Securities’ forecast of NOK 62 million (EUR 5.77 million).
Farming EBIT came in at NOK 38.5 million (EUR 3.58 million), against Arctic Securities’ estimate of NOK 82 million (EUR 7.63 million). Revenue per kilo was NOK 75.5 (EUR 7.02), below the bank’s estimate of NOK 79.5 (EUR 7.39), while farming cost per kilo reached NOK 70.9 (EUR 6.59), above the forecast of NOK 69.5 (EUR 6.46). Farming EBIT per kilo was NOK 4.7 (EUR 0.44), compared with Arctic Securities’ estimate of NOK 10 (EUR 0.93).
Arctic Securities said the weak result was primarily driven by a low superior share of 59%. The bank attributed the downgrade issues to cold winter conditions in southern Norway and high delousing activity during autumn.
Period-end biomass stood at 13,355 tonnes, down 22% year-on-year.
Net cash was reported at NOK 4,162 million (EUR 387.1 million), though this included the company’s hybrid bond classified as equity. Adjusted net cash came in at NOK 2,162 million (EUR 201.1 million), below Arctic Securities’ estimate of NOK 2,372 million (EUR 220.6 million).
Group operating EBIT of NOK 1 million implies “other” EBIT of negative NOK 39.5 million (EUR -3.67 million), reflecting losses from Sales and value-added processing ramp-up costs, alongside head office expenses.
Arctic Securities maintains a Hold recommendation on Grieg Seafood with a target price of NOK 37.0, against a current share price of NOK 33.24. The bank expects the shares to fall 3–5% following the weak operational performance, lower-than-expected cash position and reduced biomass.