The best quarterly result ever for Grieg Seafood

Increased salmon prices and reduced production costs gave the best result ever achieved for Grieg Seafood in first quarter of 2010.

- The global decline in supply of salmon has resulted in an unusual tight salmon market with high prices. The prices for salmon have been unseasonably high, CEO Morten Vike says. Fixed price contracts, however, have to a certain degree decreased the positive impact to Grieg Seafood of the high market prices, Morten Vike added.

- Reduced cost of production is an important reason behind our strong growth in profits. The operations in our two Norwegian regions, Rogaland and Finnmark, as well as in Scottland, continue their positive development, and reduced cost of production is an important reason why these three regions deliver solid improvement in profits, Vike says. – We have seen this development over some period of time, and are pleased to see it continues.

- As reported earlier, the result in Canada was weak. We chose to harvest out one production area to secure an improved biological situation and better future operations in the area. This has caused a negative one-time effect in first quarter 2010, but will improve the results in the future. Already from the second quarter, the results in Canada are expected to normalise, Vike explains.

Profit before tax was NOK 357.3m in first quarter 2010, compared to NOK 171.0m in first quarter 2010.

Bright future

- The salmon market is expected to remain tight over the next couple of years due to supply side restrictions, Morten Vike says. The supply of salmon out of Chile is not expected to pick up again until the second half of 2011, at the earliest. Currently, there is also only limited available production capacity under existing licences and production regimes in other fish farming regions globally.

- I want to underline that the improvement we have seen in operations and reduced cost of production is quite crucial for Grieg Seafood. We expect the positive trend to be maintained. Improved fish health and reduced mortality is important is important to reduce the cost of production.

Grieg Seafood’s estimated harvest volume in 2010 of 68,000 tons, an increase of close to 40% compared to 2009.