Lower harvests hit Leroy Q3 profits

LERØY Seafood, the combined salmon farming and fishing group, today announced an operating profit (EBIT) of 660 million Norwegian kroners (NOK) for the third quarter of 2018, down by almost 200 million on the same period last year.
The decline, said the company, which owns 50 per cent of Scottish Sea Farms, is mainly due to lower salmon and trout harvest volumes during the July to September period.
However, the operating revenues amounted to NOK 4,455.68 million, compared to NOK 4,373.29 million in Q3 2017, although the figure is a little down on forecasts.
Lerøy chief executive Henning Beltestad said: ‘We have had good organic production in the third quarter. We have not as harvested much, but we have converted the good production into a substantial increase in biomass for later harvesting, and the low volume, as communicated earlier, results in a lower profit in this quarter.
‘However, we have ensured good income and continued positive development of absorption costs over time.
‘We are experiencing strong demand for our quality seafood, the market is strong and we maintain our guide to a harvest volume of 166,000 tonnes in 2018 in Norway.’
The farming segment reported an operating profit before fair value adjustment related to biological assets of NOK 569 million, compared to NOK 715 million in Q3 2017.
Harvest volumes totalled 37,000 tonnes gutted weight of salmon and trout, down from 46,000 tonnes in Q3 2017. The EBIT per kg was almost unchanged at NOK 15.3.
Beltestad said: ‘Significant investments are currently being made in the farming segment. The new industrial facility in Lerøy Midt is now operational, and we have high hopes that this will strengthen the group’s competitiveness throughout its integrated value chain.
‘The building of RAS facilities for larger, high quality smolt in both Lerøy Aurora and Lerøy Sjøtroll is also proceeding according to plan.’
The VAP and distribution segment reported Q3 revenues of NOK 4,408 million, up three per cent.
‘The volatile spot prices for salmon remain challenging for processing operations, but we expect our new factories in Spain and the Netherlands to help make the group’s production and distribution even more efficient,’ said Beltestad.
Lerøy also owns a large fishing fleet and one of Norway’s highest cod quotas, and said there was strong demand for white fish.
Picture: Lerøy chief executive Henning Beltestad