Highlights - First Quarter 2015
* EBIT before fair value adjustment of biomass was MNOK 70 in Q1 (MNOK 143 in
2014).
* Production has been good throughout the period, with volume indication for 2015 maintained at 72 000 tons. Some of the expected Q1 volume has been moved to Q2.
* High costs on harvested fish in the company's European regions.
* Higher production and lower costs in BC.
* Strong underlying market in Europe, but price pressure as a consequence of
increased offer and a closed Russian market. Considerable falling/descending
prices in the American market.
* With the establishment of Ocean Quality in North America, sales from all GSF
regions are now handled through this organisation. OQ is now a subsidiary of
GSF.
EBIT per kilo stood at NOK 4.9, after including most of Ocean Quality's sales.
For GSF as a whole, including all of OQ, EBIT per kilo was NOK 5.4.
Salmon prices fell slightly in the first quarter, reflecting the continued
closure of the Russian market and a general increase in the supply of salmon
compared with Q1 2014. This is not a significant decline, and the European
market is characterised by strong demand. In the American market the trend has
been significantly weaker.
The level of business based on fixed price contracts was low in Q1 and will
remain so in the second quarter, while some increase can be expected in Q3.
PD among fish in Rogaland and harvesting from inefficient locations in Finnmark,
including North Cape, resulted in a high cost level in Norway in Q1. The cost of
harvested fish was also high in Shetland due to de-licing treatment. In BC the
cost of harvested fish is falling thanks to a good biological situation over the
last year.
Sea production was stable throughout Q1 in all regions.
The accounts show a profit of MNOK 46 before tax and fair value adjustment of
biomass, against MNOK 123 in Q1 2014.
Group sales revenues in Q1 totalled MNOK 990, reflecting a decline of 2.5% on
the corresponding period in 2014. Volumes were 0.1% lower.
Outlook
Limited supply-side growth is expected to result in a strong market in the
period ahead, but with the possibility of regional variations in the short term.
GSF expects to harvest 72 000 tons in 2015, which includes a harvested volume of
around 13 000 tons from BC. In Finnmark and Shetland the harvested volumes will
fall slightly. This must be seen in the light of harmonization with the zoning
and location structure in these regions and which will also result in slightly
higher costs in 2015. These volumes are expected to increase again in 2016. The
harvested volume in Q2 2015 is expected to be 16 700 tons.
It is expected high costs for the fish which will be harvested in the company's
European regions in Q2.
Ocean Quality has expanded its activities to include the sale of GSF's fish in
BC. All of the fish produced by GSF is therefore sold through Ocean Quality, and
this expected to provide global synergies on the sales side.
Andreas Kvame has been appointed CEO of the company and will take up his
position on 1 June 2015. It is expected that he will continue the process of
stabilising the biological situation in each of the regions. GSF's main goals
are better licence utilisation and lower costs through continuous improvement of
biological performance.
