Second highest for Lerøy Seafood Group

Key figures:

* 33.7 thousand tons gutted weight of salmon and salmon trout harvested (Q2  2012: 38.4)

* The industry spot price for whole superior salmon increased by 54% when compared with the second quarter of 2012

* Turnover NOK 2,513 million (Q2 2012: 2,306)

* Operating profit before fair value adjustment of biomass NOK 462 million (Q2 2012: 138)

* Profit before tax and fair value adjustment of biomass NOK 461 million (Q2 2012: 123)

* Operating profit per kg (before fair value adjustment of biomass) NOK 13.7 (Q2 2012: 3.6)

* Net interest-bearing debt was NOK 2,256 million (30.06.2012: 2,080)

* Equity ratio of 53% (30.06.2012: 51%)

In Q2 2013, the Group also achieved the second highest operating profit before value adjustment in its history of NOK 462 million compared with NOK 138 million in Q2 2012. The increase in operating profit compared with Q2 2012 is mainly attributed to higher prices for salmon and trout. Group harvest volumes when compared with Q2 2012 are 12% lower.

The prices achieved by the Group for Atlantic salmon and trout in Q2 2013 are significantly higher than in Q2 2012, although the increase is lower than the increase in spot prices for the same period. For Q2 2013, the Group had a contract share of 31%. The share of contracts is at a level considered normal by the Group. Production costs for salmon and trout in Q2 2013 are as previously communicated higher than in Q1 2013, and marginally higher than in Q2 2012. The increase in cost is driven by higher feed costs, but also lower average harvest weights. These factors will also impact production cost in the second half of 2013.

Income from associated companies before fair value adjustment of biomass has increased from NOK 7.5 million in Q2 2012 to NOK 25.4 million in Q2 2013. The associated company Norskott Havbruk (owner of 100% of Scotland-based Scottish Sea Farms Ltd.) has achieved good prices, resulting in a considerably higher profit figure for the second quarter of 2013 when compared with the same period last year. During Q2 2013, Lerøy Seafood Group acquired 47.8% of the shares in Villa Organic AS, which is reported as an associated company this quarter. The company contributed positively with NOK 10 million (Lerøy's share) in Q2 2013.

However, the profit comes from the recognition of a non-recurring gain of totally NOK 35 million in Villa Organic AS in connection with a previously signed sales agreement for licenses. Due to low harvest volumes and biological challenges,Villa Organic reported an operating loss on ordinary operations of NOK -1 million in Q2 2013.

The Group's net financial items in Q2 2013 were negative at NOK 27 million compared with a negative figure of NOK 22 million in Q2 2012. The Group's pre-tax profit figure before value adjustment of biomass in Q2 2013 was NOK 461 million compared with NOK 123 million in Q2 2012. Estimated tax cost in the quarter is NOK 155 million compared with NOK 9 million in the same period last year. Earnings per share before value adjustment of biomass were NOK 5.52 in Q2 2013 compared with NOK 1.60 in Q2 2012. Annualised return on capital employed (ROCE) before biomass was 24.3% in Q2 2013 compared with 7.6% in Q2 2012.

The Sales and Distribution segment reported an operating profit of NOK 56 million in Q2 2013, compared with a corresponding figure of NOK 44 million in Q2 2012. This constitutes an operating margin of 2.5% for the second quarter of 2013, compared with 1.9% in the same period last year. The Production segment reported an increase in operating profit before biomass value adjustment - from NOK 100 million in Q2 2012 to NOK 414 million in Q2 2013.

FINANCIAL INFORMATION, FIRST HALF 2013

In the first half of 2013, Lerøy Seafood Group reported total turnover of NOK 4,845 million, up from NOK 4,470 million in the same period last year. The expected price increase for Atlantic salmon and trout experienced in the first quarter of 2013 has been substantial and generates an increase in total sales income despite the 10% fall in slaughtered volume when compared with the same period last year. Income from associated companies totalled NOK 50 million in the first half of 2013, compared with NOK 15 million in the first half of 2012. Corresponding figures before fair value adjustment of biomass were NOK 40 million and NOK 16 million respectively. The Group's net financial items in the first half of 2013 were negative at NOK 54 million compared with minus NOK 44 million in the first half of 2012.

The Group's profit before tax and before fair value adjustment of biomass was NOK 461 million in the first half of 2013, compared with a corresponding figure of NOK 213 million in the first half of 2012. Estimated tax cost for the first half of 2013 is NOK 306 million compared with NOK 57 million for the same period last year. This corresponds to a profit per share before value adjustment of biomass of NOK 10.14 compared with NOK 2.86 per share in the first half of 2012. The Group's annualised return on capital employed (ROCE) before fair value adjustment of biomass was 21.6% in the first half of 2013, against 6.8% in the first half of the previous year.

Net cash flow from operations was NOK 841 million in the first half of 2013 compared with NOK 303 million in the first half of 2012. Net cash flow from investments in tangible assets including licenses was NOK 271 million in first half of 2013 compared with NOK 266 million in the corresponding period last year. The Board of Directors is satisfied with the strong cashflow generation.

The Group is financially sound with a book equity of NOK 6,428 million, which corresponds to an equity ratio of 53%. The Group's net interest-bearing debt at the end of the first half of 2013 was NOK 2,256 million against NOK 2,080 million at the end of June 2012. During this 12-month period, the Group has generated an operational cash flow of NOK 981 million. In addition to the NOK 195 million investment in Villa Organic AS, the Group has paid NOK 396 million in dividends, invested NOK 510 million in tangible assets and paid NOK 76 million in taxes.

Sales and Distribution reported operating profit of NOK 87 million in the first half of 2013, compared with a corresponding figure of NOK 85 million in 2012. This constitutes an operating margin of 1.9% for the first half of 2013, in line with the level reported in 2012. The Production segment reported an increase in operating profit before biomass value adjustment from NOK 169 million in the first half of 2012 to NOK 760 million in the first half of 2013. Of this figure, NOK 54 million comprises a gain on the sale of the Group's licences in Chile. The remaining increase in profit of NOK 212 million is primarily attributed to the price increase for Atlantic salmon and trout.

THE MARKET SITUATION AND OUTLOOK

The strong growth in the global supply of Atlantic salmon experienced over the last couple of years has declined in 2013. This has paved the way for a significant increase in prices for Atlantic salmon and trout, and allows for an optimistic outlook. At the same time, the Board of Directors believes that the prices for the Group's main products will remain volatile and that the recent price increase serves to highlight the need for framework conditions which facilitate continued growth within the seafood industry in Norway. The Management and the Board of Directors are positive towards change in framework conditions which would allow full exploitation of the industry's substantial growth potential and facilitate a more stable harvest volume throughout the year. Such changes would make the development of value added industry less demanding, create more stability in prices and make it easier to build demand in markets. Such framework conditions are essential for long-term growth in value creation for the industry. The Board of Directors expects the price level for the Group's key products to be lower in second half of 2013 compared to first half of 2013.

Sea temperatures along the Norwegian coastline in the first half of 2013 were lower than expected, resulting in less biomass growth in the sea. As of the time of writing, the Group estimates a harvest volume in 2013 of 150 thousand tons gutted weight of salmon and salmon trout, lower than the previous estimate of 154 thousand tons. As of today the Board of Directors anticipates a weaker result in third quarter compared to second quarter of 2013, but a significantly stronger result in the second half of 2013 than was achieved in the second half of 2012.