Leroy Seafoods CFO: “We’re leaders on cost”

Aslak Berge

Leroy Seafoods chief financial officer, Sjur Malm, was on the offensive at Tuesday’s earnings presentation.

Leroy Seafood Group posted earnings before tax and biomass value adjustments of EUR 99.8 million in the first quarter of 2018. That was in-line with Inquiry Financial’s consensus of EUR 99.7 million.

The salmon farmer is expecting costs to come down in all three of its business segments during 2018. Leroy Seatroll’s production costs will, however, continue to be higher than in Leroy Aurora and Leroy Midt, CFO Malm said according to TDN Finans.

Industry leader
“Leroy Aurora delivered unbelievably strong results in the first quarter, and we think the company leads the industry globally on costs and will continue that way through 2018,” the CFO said.

I Leroy Sjotroll, management still aren’t satisfied with the result

“We’re now investing in a new smolt facility. There, we’ll be placing eggs during the month, and next year the fish will come out. We really believe in this investment,” Malm said.

Leroy’s share price was up marginally during the first half hour of trading on the Oslo Stock Exchange. The Leroy stock was last traded at NOK 61.25.

In an investor update, Pareto Securities pointed to strong margins in the company’s aquaculture business, but Leroy’s processing and distribution division came in lower than the brokerage’s expectation. Moreover, the they point to Leroy adjusting downward by two percent its expected harvest volume for 2018, and based on that, they want to make minor adjustments to estimates.

Sparebank1 Markets have noticed the new volume guidance.

“Maybe a little surprising, but LSG lower the year’s volume prognosis by just 1.8 percent, from 169,000 tonnes to 166,000 t. With large operations in western and central Norway, LSG should have been hit harder by the lower sea temperatures, but it’s in-line with the total expected lost production in Norway (for all growers) of about two percent year-on-year (approximately 20,000 t),” the brokerage wrote in an investor note.

“We expect estimates to be marginally down (two to three percent 2018 EBIT) after this report, and we’ll go through our recommendation.”

Sparebank1 Markets have a “neutral” recommendation on Leroy shares, with a price target of NOK 60.


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