Grieg Seafood hit by lower prices and continued high costs in Q2

Will not reach its 100,000 tonnes target in 2020.

The fall in prices, driven by Covid-19, which has hit the salmon market in the second quarter, is noticeable in the accounts of the high-cost salmon producer Grieg Seafood. Two out of four production regions lost money during the quarter.

After a harvest volume of 23,910 tonnes, up ten percent from the same quarter last year, the fish farming company earned a modest EUR 0.3 million in EBIT before value adjustment of biomass. Turnover landed at EUR 134 million.

Lower guiding
The weak result, far below the analysts’ estaimates, is due to a combination of low prices and high production costs. In Finnmark, the company continued to struggle with winter ulcers, and the problem area Shetland has a high mortality rate, according to the report for the second quarter.

The company withdraws the guidance of 100,000 tonnes of harvest volume this year, and lowers this to 95,000 tonnes after slow growth in Finnmark.

Commenting on the Group’s performance, CEO Andreas Kvame, said: “We have particularly seen disruptions in the US market due to Covid-19, which is mainly supplied by our British Columbia region. However, lower prices in the US have been matched by improved biology, lower costs and increased competitiveness in BC.”

New region
“In Finnmark and Rogaland, the underlying biology remains strong. However, due to low seawater temperatures during the winter and spring, we have experienced reduced growth in Finnmark. Based on this external factor in combination with expectations of low market prices in the short term, we have decided to optimize production, utilize our existing licenses and postpone some harvest to 2021,” he said.

“In Shetland, cost has remained high during the quarter, due to few synergies between our operations on the Shetland isles and Skye in Scotland.”

“In our new Newfoundland region, the first eggs were put into the hatchery in July, according to schedule. First harvest is expected in 2022/23.”



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