GRIEG Seafood has placed a total net asset value on its ‘for sale’ Shetland business at 1,481 million kroner – or £125m.
The figure was published at the weekend in the company’s 2020 annual report. Grieg said it still intends to sell the operation and expects to complete the process this year, although it did not disclose if it was currently in meaningful negotiations.
The biological assets are valued at NOK 449.8m (£38m) and the property and plant at almost NOK 720m (£61m). Intangible and deferred tax assets etc make up most of the remainder.
It has appointed DNB Markets and Nordea Markets to advise on a “potential divestment of the Shetland assets”, which are no longer shown as part of the group’s main accounts.
The future focus will now be on its fish farming operations in Norway and Canada.
Grieg Seafood Shetland harvested 15,705 tonnes last year, against 11,273 tonnes in 2019.
The report says: “Significant volumes were harvested from the Isle of Skye towards the end of the year, which has been affected by severe biological challenges.
“The increased volume was offset by low market prices throughout most of the year and low price achievement on small fish from sites at the Isle of Skye.
“The operating income from the disposal group Shetland amounted to NOK 969m
(£81.7m) last year, compared to NOK 816m (£68.8m) in 2019.
“The EBIT was impacted by high costs, due to biological challenges on Skye. At the year end, only one farm remained with fish on Skye, which will be harvested during the first quarter of 2021.”
Grieg Shetland made a net loss (for the period from discontinued operations in 2020) of NOK 231.5m (£19.5m) compared to a profit of NOK 18.9m (£1.6m) in 2019.
Turning to the group performance, CEO Andreas Kvame told shareholders that 2020 “did not go as planned”.
He said: “Not only did Covid-19 severely impact our markets. We also experienced extraordinary biological challenges in several production regions. Despite impressive efforts by dedicated employees, Grieg Seafood did not reach our targets.
“We must adapt, change and execute needed measures to get back on track. A crisis is a good time to do just that. During the year, we have taken action to reshape our business. We have narrowed our operational focus to the production regions with the best potential for profitable growth – Norway and Canada. “
He added: “We have restructured our organisational set-up and added key competences to improve competitiveness and sustainability.
“We have established a new sales and market organization to increase the value of our salmon downstream. And we have found new ways to drive change towards a sustainable global food system – both in production and our value chains. “
Kvame also said demand for salmon remained strong last year, but shifted from restaurants to retail as consumers ate more dinners at home.