Q1 2022 Results – Best Q1 Ever thanks to strong market and continued biological improvement

Grieg Seafood ASA

Grieg Seafood ASA

Highlights

  • EBIT before production fee and fair value adjustment of NOK 453 million, driven by high prices and improved biological performance

  • Sales organization with positive impact on price performance in all regions

  • Operations in Norway are less affected by winter sores this winter than last year

  • Improved cost level in BC

  • Good smolt production in Newfoundland, ready for first transhipment to sea in May

  • Seawater production good in all regions with stable survival and group farming costs of NOK 43.4 per kg, or NOK 41.9 per kg for our Norwegian operations

  • Expect a harvest of 22,300 tons in the second quarter of 2022 and 90,000 tons for the full year 2022

Financial results

Operating EBIT for Grieg Seafood was NOK 453 million in the first quarter, up from the negative NOK 16 million in the same period last year. The harvest volume was 16,900 tons during the period (13,580), giving an operating EBIT per kg of NOK 26.8 (-1.2).

The farming activities delivered strong results, driven by high prices, improved organic performance and better price performance through close coordination between farming and sales. In Finnmark, the impact of winter sores was significantly lower compared to last year, partially offsetting the effect of low average harvest weights and early quarter harvests with lower spot prices on price development. Rogaland benefited from a favorable harvest profile throughout the quarter, combined with a strong underlying cost performance.

British Columbia delivered solid results, driven by good price development due to a favorable harvest profile and VAP premium, as well as improved agricultural costs due to better biological conditions and increased survival.

Freshwater production in Newfoundland is progressing according to plan. The fish are healthy and growing well, and the first release is scheduled for May.

“The first quarter of 2022 was unlike anything I’ve seen before in my 26 years in the salmon farming industry. The market has been incredibly strong, with historic prices across the board. Grieg Seafood had the best result we’ve had in a first quarter. have ever achieved.

All our production regions performed well during the quarter due to improved biological control and increased survival. In Finnmark, we had significantly less winter sores this year than in 2021, as a result of successful mitigation measures. We are also seeing a positive impact from our integrated sales organization, which has shifted its focus in sales from margin to operating profit since its inception.” says CEO Andreas Kvame in Grieg Seafood.

Outlook

The global Atlantic salmon harvest in 2022 is expected to decline by 1%, with volumes declining in all major regions.

The Covid-19 pandemic has impacted the salmon market over the past two years, with demand shifting from HoReCa to the retail segment. The HoReCa segment is recovering and it also appears that the pandemic has increased demand in the retail segment as consumers have become accustomed to cooking salmon at home. With no supply growth in 2022 and prospects for continued strong demand, we expect a strong market going forward.

Grieg Seafood aims for an annual contract share of 20-50%. The estimated contract share for the Norwegian business in the second quarter of 2022 is 15% and 20% for the full year 2022. For 2022, we estimate that approximately 5-10% of our harvested volume will be sold as VAP.

In the second quarter of 2022, the expected harvest volume is 22,300 tons, distributed as follows:

  • Rogaland: 4,800 tons

  • Finnmark: 8,500 tons

  • BC: 9,000 tons

Results presentation
CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results via webcast today at 9:00 am CEST.

The presentation can be accessed via investor.griegseafood.com or via the following link: https://channel.royalcast.com/landingpage/hegnarmedia/20220513_1/

The presentations and subsequent Q&A will be held in Norwegian. An English transcript of the presentations will be made available at: https://investor.griegseafood.com/reports-&-presentations#quarterly

For further questions, please contact:
Andreas Kvame, CEO
Mobile phone: +47 907 71 441

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

About Grieg Seafood
Grieg Seafood ASA is one of the world’s leading salmon farmers. Our farms are located in Finnmark and Rogaland in Norway, and in British Columbia and Newfoundland in Canada. Our head office is located in Bergen, Norway. Grieg Seafood ASA was listed on the Oslo Stock Exchange in June 2007. More than 750 people work in the company in our regions.

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

For more information, visit https://investor.griegseafood.com/

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

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