Lerøy beats expectations with Q1 numbers

Despite a series of challenges this winter, the Lerøy Seafood Group has announced better than expected 2024 first quarter results.

Lerøy, which also owns one of Norway’s largest white fish trawler fleets, produced an operational EBIT or operational profit of NOK 842 million (£62m).

This is down from NOK 989 million (£73m) in Q1 last year, but the outcome is far better than what was being predicted by analysts.

CEO Henning Beltestad said: “We have had a good quarter in aquaculture with strong biological development.

“In light of very cold sea temperatures, our fish grow well. It is also very pleasing to note a significant improvement in biology and earnings in Scottish Sea Farms (in which Leroy owns a half share with SalMar.)

Lerøy generated a Q1 operating income of NOK 7,110 million (£522m), up from NOK 6,791 million (£494m) a year ago.

Beltestad said the group’s downstream business (VAP S&D) generated an operational operating profit of NOK 176 million (£13m) in the first quarter, driven by operational improvements, high capacity utilization in Norway and increased product prices.

He added: “With our fully integrated value chain, we have an advantageous position with high processing capacity in Norway, which we have utilised well in the quarter. We have good momentum and have succeeded in reversing the development in a number of businesses downstream.”

The group had implemented new screening technology which was showing promising results with a minimum need for lice treatments. Better genetics were also leading to more robust fish and higher trout production.

The Q1 report said: “In line with the normal seasonal pattern, the harvest volume in Norway has been low in the first quarter, and has also been affected by quality downgrades.

“Lerøy’s Farming segment has been affected by low sea temperatures, but the biological development in the quarter was good. Downstream activities experienced seasonally low volumes in some end markets, but high utilisation of processing capacity in Norway has contributed to good earnings in the quarter. “

The company’s wild catch total was down by just over 1,000 tonnes to 24,093 tonnes, due mainly to quota cuts, of which 6,651 tonnes was cod. There was also a sizeable increase, however, in the market price of both cod and haddock.

Henning Beltestad, CEO Lerøy Seafood