Grieg Seafood ASA: Q3 2021 results

03 Nov 2021 06:00 CET

Company Name

GRIEG SEAFOOD, Grieg Seafood ASA 20/25 FRN

ISIN

NO0010365521, NO0010885007

Market

Oslo Børs

Symbol

GSF

Third quarter highlights

* Operating EBIT of NOK 149 million (-14 million) driven by high prices in BC
and declining cost level
* Underlying operational improvement, with increased survival in all regions.
Expect lower costs towards year end
* Good performance in Shetland, EBITDA of NOK 53 million (assets held for
sale). UK competition authorities expected to decide on Shetland transaction
by 15 December 2021
* Value added processing capacity for part of our volume secured in Norway
* One site ASC certified, total of 30 sites or 56% of net production certified
* Expect harvest ex Shetland of 25 100 tonnes in Q4 2021, 77 000 tonnes for
the full year 2021 and 90 000 for 2022



Financial results

Grieg Seafood harvested 20 479 tonnes ex. Shetland in Q3 2021, up 42% compared
to 14 416 tonnes in Q3 2020. Sales revenues from continuing operations amounted
to NOK 1 303 million, an increase of 43% compared to Q3 2020. The price
achievement was NOK 58.4 per kg vs NOK 52.9 per kg in Q3 2020. The average spot
salmon price (Nasdaq Salmon Index)) for Q3 2021 was NOK 54.5 per kg, up NOK 7.4
per kg from Q3 2020. The difference in achieved price, measured by sales
revenue/kg compared to Q3 2020, had a positive contribution to the EBIT by
NOK 113 million. The Group's price achievement for Q3 2021 was positively
impacted by strong market conditions for BC. The Norwegian regions performed
below the Nasdaq Salmon Index mainly due downgraded volume, partly offset by
positive contributions from fixed price contracts.

The higher harvest volume for the quarter impacted EBIT by NOK 10 million
compared to Q3 2020, while decreases in operational costs impacted EBIT
positively by NOK 51 million compared to Q3 2020. On average, the Group's
farming costs decreased by NOK 2.5 per kg from NOK 51.2 per kg in Q3 2020 to NOK
48.7 per kg in Q3 2021, and down NOK 2.0 per kg from Q2 2021.

The Group's EBIT before production fee and fair value adjustment of biological
assets was NOK 149 million (NOK -14 million) for the quarter, corresponding to
an EBIT per kg of NOK 7.3 (NOK -1.0 per kg).

Improved access to VAP capacity

During the third quarter, Grieg Seafood established a value added product (VAP)
sales department, which will be a key contributor to increase the VAP product
portfolio from Norwegian and Canadian origin.

As a first step towards repositioning the company in the market, Grieg Seafood
has signed a Letter of Intent for cooperation with Isfjord Norway AS for value
added processing (VAP) capacity in Norway. Through the cooperation Grieg Seafood
will process a part of its harvest volumes at Isfjord Norway and sell finished
products through its in-house sales organization. This capacity will also
contribute to better price achievement should fish be downgraded.

Outlook

Despite high global supply growth in the third quarter 2021, up 7% compared to
Q3 2020, the salmon spot price remained at seasonally good levels, driven by
solid demand from the retail sector, in addition to the ongoing post pandemic
recovery in the HoReCa segment. Retail demand in Europe and Asian countries has
been particularly strong so far this year.

In North America, a strong increase in demand in the US, combined with a
significant reduction in harvest volumes from Chile, tightened the market for
Atlantic salmon and prices increased. The tight market in North America also
increased import of Norwegian salmon to this market, positively impacting prices
in Europe as well.

Going forward, Grieg Seafood see the case for a strong recovery in the HoReCa
segment as society gradually moves back to pre-pandemic levels. With global
supply growth muted for the remainder of 2021 and the start of 2022 due to
significant decrease in supply of volumes from Chile and modest supply growth in
Europe, outlook for continuing strong market prices is good.

Grieg Seafood targets a contract share of 20-50%. Estimated contract share for
the Norwegian operations in Q4 is 20%, and 29% for 2021.

In the fourth quarter of 2021, expected harvest volume is 25 100 tonnes,
distributed as follows:

* Rogaland: 7 100 tonnes
* Finnmark: 13 400 tonnes
* BC: 4 600 tonnes

Due to PD in Rogaland and optimization of capacity utilization in addition to
skewing of volume to 2022 in Finnmark, estimated harvest volume for the full
year 2021 is reduced by 3 000 tonnes to 77 000 tonnes ex Shetland. Estimated
harvest volume for 2022 is 90 000 tonnes.


Results presentation

CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results live at
Høyres Hus, Stortingsgaten 20, Oslo, and by webcast the same day at 8:00 a.m.
CEST.

The presentation can be accessed at investor.griegseafood.com, or with the
following link:
https://channel.royalcast.com/landingpage/hegnarmedia/20211103_1/

The presentations and the subsequent Q&A will be held in Norwegian. An English
transcript of the presentations will be made available at
investor.griegseafood.com.


For further enquiries, please contact:

Andreas Kvame, CEO
Cell phone: +47 907 71 441

Atle Harald Sandtorv, CFO
Cell phone +47 908 45 252



About Grieg Seafood

Grieg Seafood ASA is one of the world's leading salmon farmers, targeting
130 000 tonnes of harvest (GWT) in 2025. Our farms are in Finnmark and Rogaland
in Norway, British Columbia and Newfoundland in Canada, and Shetland in the UK.
Our headquarter is located in Bergen, Norway. Grieg Seafood ASA was listed at
the Oslo Stock Exchange in June 2007. More than 900 people work in the Company
throughout our regions.

Sustainable farming practices are the foundation of Grieg Seafood's operations.
The lowest possible environmental impact and the best possible fish welfare is
both and ethical responsibility and drive economic profitability. Towards 2025,
we aim for global growth, cost improvements and to evolve from a pure salmon
supplier to an innovation partner for selected customers.

To learn more, please visit www.griegseafood.com



This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.


Source

Grieg Seafood ASA

Provider

Oslo Børs Newspoint