Lerøy Seafood is planning to move into land based salmon farming. The company published its financial results for the final quarter of 2020, showing that operating profits fell from NOK 769m (£65m) in Q4 2019 to NOK 441m (£37m). Lerøy is the joint owner of Scottish Sea Farms.
As with other final quarter results announced this week, low fish prices stemming from the coronavirus pandemic were largely to blame for lower profits year-on-year. Nonetheless, the board is proposing a dividend of NOK 2 per share.
It said: “The global pandemic Covid-19 has a negative effect on demand and has resulted in lower prices for both redfish and whitefish. Weaker price achievement is the most important reason for lower earnings in the fourth quarter of 2020 compared with the same quarter last year.”
The company revealed that it is in negotiations to develop a new RAS (recirculating aquaculture system) facility over three stages in the western Norway. The first and second stages involve the production of post-smolt, but the third stage can also be used to produce salmon up to slaughter size.
The location means the site will be able to link up to the group’s aquaculture operations in western Norway, enabling good interaction between sea and land-based operations, the company said.
Lerøy is one of the world’s largest totally integrated seafood groups, comprising salmon farming, cod and haddock trawling, and a sizeable fish processing operation. It owns 10% of Norway’s total cod quota and caught 7,200 tonnes during the period.
Q4 sales totalled NOK 5,170m (£437m), against NOK 5,239m (£442m) in 2019. Harvest volumes were up from 42,800 tonnes to 48,300 tonnes.
CEO Henning Beltestad said the RAS project would help the company understand land-based farming better. He explained: “This learning will possibly, if desired, also be used for the realization of land-based projects also in other regions. Lerøy’s focus is developing an efficient and sustainable value chain for seafood that meets the customers’ long-term demand.
“This not only provides cost-efficient solutions, but also quality, availability, a high level of service, traceability, and competitive climate-related and environmental solutions. Thanks to our robust and long-term focus on the customer, we feel that we have emerged all the stronger from a difficult year.”
He added: “We have invested heavily in our value chain in recent years, in the form of assets, human resources and our approach to operational improvements. This is a long-term process but, as we enter 2021, we are starting to reap the results of our initiatives and we are confident that we have a strong position for the years to come.”