Grieg drops into Q3 loss

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Grieg Seafood has become the first major salmon farming company for many years to plunge into the red.

The company, which farms in Norway and in Newfoundland and British Columbia, Canada, today unveiled a third quarter operational EBIT or operational loss of NOK 86m (£6.3m).

This compares with an operational profit of NOK 145m (almost £11m) 12 months ago.

In August, Grieg warned that it was suffering from severe biological issues including ISA (infectious salmon anaemia), particularly in the Norwegian region of Finnmark, which it expected would impact on the third quarter results.

The harvest volume was 12,245 tonnes in the period ( down from 22,923 tonnes a year ago), which gives a negative operational EBIT (loss) per kg of NOK 7.0 (£0.51).

Commenting on the quarter, Andreas Kvame, CEO of Grieg Seafood ASA said: During the third quarter, Grieg Seafood’s main priority was to let the fish grow and build biomass.

“As a result, harvest volumes were low, causing increased costs per kilo. The operational performance was impacted by a mixture of different biological challenges, including spiro in Finnmark, harvesting at low weights due to previous ISA outbreaks in Rogaland and seasonal biological issues in British Columbia. Unfortunately, these events reduced our price achievement and earnings.

He continued: “I am not satisfied with the results. We are turning every stone in the regions to get back on track.

“Mitigating measures have been implemented, such as vaccination programs against ISA and winter ulcers as well as a UV filter to prevent Spiro [the parasite Spironucleus salmonicida] from entering our smolt facility. Due to the long production cycle of the salmon, it takes some time before we see the effect of the measures. I am encouraged that the underlying biology in Rogaland is good. In Finnmark, the generation of fish transferred to the ocean during 2023 has not been impacted by Spiro and is performing well.”

He said the development in Newfoundland was the high point of the quarter, with a commenced first harvest in October. Biological control has been strong, with high survival, good fish health and welfare, good growth, good product quality and no sea lice issues. We look forward to taking the next steps in Newfoundland.

In addition to short-term measures to improve biology, Grieg said it is also taking steps towards its ambitions of sustainable growth in the medium to long term.

Kvame continued: “We are investing NOK 1.1 billion in a 3,000 tonnes post-smolt expansion in Finnmark, to advance biological control, fish health and welfare and sustainability.

“In Canada, we see huge opportunities for sustainable salmon farming in close proximity to the growing North American market. We aim to realize the Canadian potential.

“However, developing the Canadian operations require substantial investments at a time when the resource tax and overall inflation require greater capital discipline. As such, we are seeking long-term partners to invest with us, allowing us to develop our business in Canada at pace.

In BC, harvest volume was 6,108 tonnes in the quarter against 7,908 tonnes last year. The seawater performance was impacted by seasonal challenges including high sea lice pressure necessitating treatments and events of low dissolved oxygen, however the situation improved towards the end of the quarter. The survival rate remained stable from last quarter, however these events impacted farming costs, resulting in negative results for the BC operations during the quarter.

In Newfoundland, both freshwater and seawater production was good. High smolt quality combined with favourable biological conditions contributed to good fish health and survival high. During the quarter, Newfoundland completed the smolt transfer to sea this year, which totals 2.5 million smolt with an average weight of 140 grams.

The 12 month rolling survival rate as of quarter end was 96%, with good growth at sea, and no sea lice issues.

Grieg CEO Andreas Kvame

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