Shetland shines as Grieg Q2 profits rise

Andreas Kvame, Grieg Seafood

Grieg Seafood delivered higher profits during the second quarter of this year with its outgoing Shetland operation performing particularly well. The company’s Chief Executive Andreas Kvame said, however, that he was “not satisfied” with the results.

The company has agreed to sell its Shetland business to Scottish Sea Farms for £164m in a deal which it expects to complete by the end of the year.

The group made a pre-tax profit for the quarter of NOK 131m (£11m), well up from NOK 4m (£326,300) in Q2 of last year. EBIT for Q2 this year was NOK 44m (£3.6m).

Sales were lower than predicted, down from NOK 1.16bn (£95m) to NOK 1.1bn (£90m) while harvest volumes fell from 20,140 tonnes in Q2 last year to 17,812 tonnes this time.

Regarding Shetland, Andreas Kvame said: “We entered a sales purchase agreement with Scottish Sea Farms to sell our Shetland operations for £164m (now awaiting regulatory approval).

“Substantial improvement efforts over several years are completed in the region, resulting in a profit for the quarter.

“I am pleased to hand over a healthy business to new owners for further development, and I am confident that the operations will keep creating value for a long time to come.

He added: “I want to sincerely thank our Shetland employees for their hard work and dedication over many years. The sale and high price leave us in a strong financial situation and provides room to engage in growth initiatives in Norway and Canada, in line with our strategy.”

Kvame said Grieg Seafood took new and important steps towards a post pandemic recovery during Q2.

He went on: “The market is getting better, prices are increasing, and biology is improving across the regions. At the same time, we still experienced some bumps in the road. I am not satisfied with an EBIT of NOK 44m.

“British Columbia was a highlight with stable biological control for yet another quarter, coupled with high prices in a strong US market. Rogaland delivered a satisfactory result, though the share of fixed price contracts affected earnings.

“Finnmark [Norway], however, remained impacted by remnants of the challenging biology from last winter. Downgrades, harvest weight and the harvest profile affected price achievement negatively.”

He said that several actions has been taken to avoid similar problems during future winters, from changes in the company’s approach to transferring fish to sea and new vaccine strategies to more post smolt and VAP (value-added production) capacity.

Kvame concluded: “We are also continuing to develop our Newfoundland region responsibly and step by step. To increase chances of optimal biological conditions in sea, we have postponed transfer of fish to sea until next spring. Placentia Bay is a promising area for sustainable salmon farming, and as in any greenfield project, we must continuously evaluate measures to reduce risk.”