Leroy hits half-year profits high

THE Lerøy Seafood Group, whose operations include both fish farming and conventional trawling, is the latest Norwegian aquaculture business to announce an overall positive performance for the second quarter of this year.
The operating profit (before fair value adjustment) was NOK 801 million compared with NOK 760 million in Q2 2016. This corresponds to operating profit on lower harvest figures of NOK 27.3 per kg against NOK 18.5 per kg in Q2 2016.
The group reported revenues of NOK 4,224 million, compared with NOK 4,262 million in the same period in 2016. But the harvest volumes of salmon were down by 36 per cent on Q2 2016.
But the group said these figures must be viewed in light of the high harvest volume in Q1 2017. For 2017 as a whole, the harvest volume is expected to be higher than last year.
Again, including the 2017 Q1 figures, the group’s revenue for the first half of this year was NOK 9,684 million, up 20 per cent on the equivalent six months of last year.
The first half operating profit was NOK 2,078 million, substantially up on the comparable 2016 figure of NOK 1,345 million. The first half pre-tax profit figure was NOK 2,134 against NOK 1,367 in 2016.
Lerøy CEO Henning Beltestad (pictured) said: ‘Salmon and trout prices remain at a high level and, as a result, Lerøy Seafood Group can report its highest revenue and highest operating profit in any half-year period in the group’s history.
‘As previously reported, the harvest volume for salmon and trout is down from the same quarter last year, but for the year as a whole, however, the harvest volume is expected to be higher than in 2016.’
Almost a year ago, Lerøy took over the Norway Seafoods group and the trawler company Havfisk ASA.
Havfisk has licence rights to harvest just over 10 per cent of the total Norwegian cod quotas in the zone north of 62 degrees latitude, corresponding to more than 30 per cent of the total quota allocated to the trawler fleet.
Havfisk’s total catch volume in Q2 2017 was 16,769 tonnes, compared with 17,020 tonnes in Q2 2016. Haddock prices rose by 30 per cent over the period, cod was up by nine per cent but saithe prices fell by 28 per cent.
The total contribution to operating profit made by these two companies in Q2 2017 was NOK 86 million.
Beltestad said: ‘Havfisk and Lerøy Norway Seafoods are important companies and support the group’s long-term industrial strategy.
‘We look forward to generating lasting value by developing the companies by means of long-term industrial planning, and are confident we will succeed in this together with our employees at sea and on shore.
‘The recent tabloid debate on regulatory factors has unfortunately been dominated by a short-term mentality, fear of change and a lack of understanding of what is required to achieve industrial development.
‘I have faith in the Norwegian authorities and trust that they will now allow us to develop our business without interruption in the years to come.
‘Good framework conditions based on an understanding of what is required to sustain and create jobs and value afford more potential for future success.’
Turning back to farming operations, he continued: ‘It is positive for the group that trout prices, after three difficult years, have now seen a substantial improvement and are marginally higher than salmon prices in Q2 2017.
‘The sustained high price level for salmon is, however, strongly affected by the fact that the Norwegian fish farming industry has not increased production since 2012.
‘In the near future, it will be of decisive importance for the long-term competitiveness of this industry that Norway gradually starts to increase production.’