Grieg Seafood post an EBIT/kg of €1.18 in Q1

Aslak Berge

“The first quarter of 2020 took a dramatic turn when the Covid-19 pandemic hit”.

On Thursday, the salmon farmer Grieg Seafood posted its Q1 results on the Oslo Stock Exchange, highlighting a 100,000 tonnes harvest volume this year but a lower contract share.

In mid-April, Grieg Seafood announced poor results in Finnmark, linked to a mix of illness, winter ulcers and harvest quality. The company harvested a total of 18,362 tonnes of salmon and achieved an operating profit of EUR 180.4 million (up from EUR 148 million) in the first quarter of the year. This implies an EBIT/kg of EUR 1.18.

Grieg Seafood achieved EBIT of EUR 21.6 million in the first three months of the year. The revenue increase was driven by higher harvest volume as well as the currency effect of a weak NOK, according to the stock exchange announcement on Thursday morning.

Grieg Seafood maintains a guide of 100,000 tonnes of salmon as an annual harvest volume in 2020.

“The first quarter of 2020 took a dramatic turn when the Covid-19 pandemic hit. Our top priority in this situation is the safety and wellbeing of our employees, their families and the local communities where we operate,” said CEO Andras Kvame.

“We hold on to our target of 100 000 tonnes harvest in 2020. By 2025, we aim to harvest at least 150 000 tonnes of Atlantic salmon, to achieve cost leadership and to reposition Grieg Seafood in the value chain. In the first quarter, we took an exciting first step on this growth journey by acquiring Grieg Newfoundland,” he added.

Fixed-price contracts
Grieg Newfoundland was built as its own entity and later sold to Grieg Seafood, by the company’s chairman Per Grieg jr. The company has a long-term potential of 30,000-45,000 tonnes in harvest volume. The first harvest in the region is expected in 2022/2023.

Grieg Seafood also reported that they have a low fixed price contracts share, 20 per cent in Norway and nine per cent in the UK for 2020. This indicates that the company will notice the heavy price drop in the second quarter.


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