Grieg Seafood ASA: Q3 2024 results

27 Nov 2024 06:00 CET

Figures for Q3 2023 in brackets

Highlights

* Harvest volume of 17,806 tonnes (12,245 tonnes)
* Operational EBIT in the quarter of NOK -175 million (NOK -86 million), with
operational EBIT/kg of NOK -9.8 (-7.0). Operational EBIT from Farming Norway
of NOK 69 million while NOK -218 million from BC due to algae bloom and low
DO (dissolved oxygen)
* All-time high production in Norway and MAB (maximum allowable biomass) fully
utilized at quarter end - biomass in Finnmark rebuilt post-Spiro
* Process to identify long-term partners to take part in the development of
Canadian operations is progressing
* Dialogue with interested parties for both strategic partnership and
business sale
* Established NOK 750 million bridge loan facility to maintain financial
flexibility
* Expect to harvest 24,400 tonnes in Q4 2024, target harvest volume for the
full year 2024 at 78,500 tonnes

Financial results

Operational EBIT for Grieg Seafood was negative by NOK 175 million in the
third quarter of 2024, compared to negative NOK 86 million in the
corresponding period in 2023. Harvest volume was 17,806 tonnes during the
period (12,245), which gives an operational EBIT/kg of NOK -9.8 (-7.0).

In Rogaland, harvest volume for the quarter was 8,543 tonnes (4,783), up 79%
compared to third quarter 2023. Underlying operational performance was good
with efficient utilization of MAB (maximum allowable biomass) throughout the
quarter and fully utilized at quarter-end. The price achievement in Rogaland
was supported by higher average harvest weights (avg 4.0 kg) compared to Q3
2023, however dampened by lower market prices and lower harvest volumes in the
beginning of the quarter when the prices were higher. Operating EBIT/kg ended
at NOK 8.8 (0.7).

In Finnmark, harvest volume for the quarter ended at 6,045 tonnes (1,354).
Strong seawater production during the quarter resulted in harvest volume being
1,000 tonnes above guiding as biomass was rebuilt at MAB during the quarter.
Earnings were positively impacted by a significantly improved superior share
of 97% compared to 50% in Q3 2023, however suppressed by lower average harvest
weights, in addition to timing of the harvest at the end of the quarter, when
the spot prices were lower. Operational EBIT/kg ended at NOK -1.0 (-27.1).

Seawater production in British Columbia was challenging in the beginning of
the quarter with extended events of low dissolved oxygen (low DO) and algae
bloom, causing an increase in mortality rates and reduced growth. However,
production improved at the end of the quarter, with stable production going
into Q4. The price achievement was negatively impacted by low average harvest
weights and lower share of superior quality fish, which ended at 83% for the
quarter. As a consequence of the algae bloom and related write-downs,
operational EBIT/kg ended at NOK -67.7 (-3.2) on a harvest volume of 3,217
tonnes (6,108), overall, in line with the estimate for the quarter given in
the Q2 2024 quarterly report.

Seawater production in Newfoundland was good in the quarter and according to
previously communicated production plans, the Newfoundland operations had no
harvest during the period.

Commenting on the quarter, Andreas Kvame, CEO of Grieg Seafood ASA said:

"The third quarter of 2024 was a mixed bag for Grieg Seafood. While the
financial performance was impacted by seasonally lower spot prices and carry
costs from historic incidents, our underlying performance was good.
Development was particularly good in Rogaland and Finnmark, as we are going
out of Q3 with a record-high standing biomass in sea in Norway after an
all-time high seawater production over the quarter.

Finnmark experienced strong seawater production during the quarter, maximizing
MAB capacity and rebuilding biomass post-Spiro. The region is still facing
biological challenges and the company faced sea lice challenges during the
quarter. However, we are pleased to register that proactive investments in
treatment capacity are proving positive results, contributing to better
biological control and fish welfare. Earnings in the region were impacted by
the seasonally lower prices and harvest of the remaining Spiro-impacted fish.
Farming costs continued down, confirming our expectations of a continued
positive development in this region.

Also, Rogaland experienced strong seawater production, driven by high
capacity-utilization and good biology. While earnings were impacted by the
lower prices, costs came down during the quarter and are expected to remain
stable in the coming quarter.

Operations in British Columbia were impacted by occurrence of algae bloom,
significantly reducing survival-rates and impacting growth. Harvesting for
2024 was completed during the quarter ending at 12,500 tonnes. A decision on
the transition plan for the salmon farming industry in the region is yet to be
made. As Grieg Seafood awaits the transition plan to be concluded, investments
are put on hold.

Our operations in Newfoundland continue to develop according to plan. No fish
were available for harvesting during the quarter. Harvesting of the second
generation commenced in October and total harvest for the full year is
expected to end at around 11,000 tonnes.

Looking forward, investments in operational assets and biomass are mainly
developing according to plan. We are excited for Rogaland's first smolt
stocking in Årdal Aqua and look ahead to the completion of the facility's
remaining units in 2025. I am also pleased to say the construction of our new
post-smolt facilities in Finnmark and Newfoundland, in addition to the VAP
facility at Gardermoen, is progressing well."

Operational update for Q4 2024

So far in the fourth quarter, we have primarily experienced good seawater
production in all of our regions. In Finnmark, we have, unfortunately, been
hit by string jellyfish at our site Vinnalandet, causing elevated mortality at
this farming location. The situation is monitored closely, and measures have
been taken to safeguard fish welfare. The company has already executed early
harvests, and due to the lower harvest weight, farming cost for Q4 2024 is
therefore expected to increase compared to Q3 2024. The lower harvest weight
will also have negative impact on price achievements. Costs related to
mortality write downs and higher harvest cost are estimated in the range of
NOK 70 to 90 million for Q4 2024.

Maintaining financial flexibility as loan agreement entered into in Q4 2024

To maintain financial flexibility, Grieg Seafood ASA has in Q4 2024 entered
into a NOK 750 million bridge term loan facility with Nordea Bank AbP, filial
i Norge and DNB Bank ASA as arrangers and lenders.

Outlook

The global supply of Atlantic salmon in 2024 is expected to slightly increase
compared to 2023. With expectations of limited supply growth in 2024, combined
with an outlook for continuing strong demand fueled by an increased focus on
healthy food and sustainably produced proteins, we expect a sustained good
market.

Estimated contract share for the Norwegian operations is 7% for Q4 2024 and 8%
for the full year 2024.

In the fourth quarter of 2024, expected harvest volume is 24,400 tonnes,
distributed as follows:

* Rogaland: 7,300 tonnes
* Finnmark: 11,400 tonnes
* BC: 0 tonnes
* NL: 5,700 tonnes

The company guides for a harvest volume of 78,500 tonnes in 2024 (unchanged
since Q2 2024 reporting), distributed as follows:

* Rogaland: 28,000 tonnes
* Finnmark: 27,000 tonnes
* BC: 12,500 tonnes
* NL: 11,000 tonnes

For 2025, the company guides for a harvest volume of 84,000 tonnes,
distributed as follows:

* Rogaland: 30,000 tonnes
* Finnmark: 32,000 tonnes
* BC: 12,000 tonnes
* NL: 10,000 tonnes

Results presentation

Chief Executive Officer (CEO) Andreas Kvame and Chief Financial Officer (CFO)
Atle Harald Sandtorv will present the results live at Hotel Continental,
Stortingsgaten 24/26, Oslo today at 08:00 a.m. CET.

A live webcast from the presentation can be accessed at
https://investor.griegseafood.com/reports-&-presentations#quarterly
or with the following link:
https://channel.royalcast.com/landingpage/hegnarmedia/20241127_2/

An English transcript of the presentation will be made available at
https://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. Our farms are
in Finnmark and Rogaland in Norway, and British Columbia as well as
Newfoundland in Canada. Our headquarter is located in Bergen, Norway. Grieg
Seafood ASA was listed at the Oslo Stock Exchange in June 2007.

Sustainable farming practices are the foundation of Grieg Seafood's
operations. The lowest possible environmental impact and the best possible
fish welfare is both an ethical responsibility and drive economic
profitability.
To learn more, please visit https://griegseafood.com/.

The information included in this announcement may partly be defined as inside
information pursuant to article 7 of the Market Abuse Regulation. The
information is publicly disclosed in accordance with article 17 of the Market
Abuse Regulation as well as section 5-12 of the Norwegian Securities Trading
Act.
The stock exchange announcement was published by May Hansen, Administrative
Secretary, Grieg Seafood Group ASA, on 27 November 2024 at 6:00 a.m. CET.

More information:
Access the news on Oslo Bors NewsWeb site

633246_2024 Q3 GSF Quarterly Report.pdf
633246_2024 Q3 GSF Quarterly Presentation.pdf