Close to 50 percent contract share hampered Lerøy’s price achievement

Aslak Berge

Missed out on large parts of the record price period.

“It has been a long time since I have seen so many people at our quarterly presentations,” Henning Beltestad said. He is on home turf, at the Scandic Flesland Hotel, during the Vestland event at Børs. Here, a number of the leading industrial companies in the county present their results for the second quarter on Wednesday.

Lerøy brought in an operating profit excluding settlement costs and before value adjustment in the second quarter of NOK 923 million (€135.1 million) .

High proportion of contracts
“These are good figures, but we have been influenced by a high proportion of contracts,” Beltestad admited. “Our price achievement is influenced by a significant proportion of contracts, close to half of everything is sold on long contracts. These contracts were largely concluded in the autumn of 2021, when the price projections were completely different to what we have seen this year.”

Henning Beltestad. Photo: Trine Forsland

“We will have significantly higher volumes than we have had in the first and second quarters,” he continued.

“This year we expect a volume of 180,000 tonnes, which is somewhat lower than what we budgeted at the beginning of the year.”

Capital tie up
“The main picture this quarter, in absolute terms, is that there are very good results. If we had everything in the spot market, it would not only have been a good quarter, but the best quarter ever,” CFO Sjur Malm explained.

But he does not hide the fact that cost inflation is a significant challenge.

“When prices go up, working capital goes up. When feed prices go up, storage in the sea becomes more expensive. The working capital tie-up hits the cash flow,” Malm said.

“Should we have handled the fantastic spot price better? We will evaluate that. But at the same time, this is not being run for three months, but in a longer perspective,” he pointed out.

“Then we have invested a lot in post smolt facilities. This has contributed to Lerøy being able to increase volumes significantly.”

Sjur Malm. Photo: Trine Forsland

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