Weak results from Grieg Seafood

According to a release from Grieg Seafood tha EBIT pre IFRS adjustment of biological assets of 5.5 MNOK in Q3 2009 compared to 60.3 MNOK in 2008. A considerable negative result in Shetland due to premature harvest of fish in one production area hampered by high sea lice burden. Weaker than expected result in Canada due to algae and oxygen problems during the season. Low harvest volumes in Norway, causing higher share of fixed costs. The positive development in Rogaland continues with a strong quarterly result despite low harvest volume. Salmon prices fell during the quarter due to a strong increase in supply from Norway. The salmon market was in Q3 influenced by a strong increase in the supply, in particular from Norway. This caused a reduction in prices in the period August until October, and has caused a temporary negative shift in the market balance. Grieg Seafood reduced the harvest in Norway considerably during the quarter, which implies higher fixed costs and a reduced result. The result in Shetland is strongly negative. The reason is premature harvest of one production area on the west coast of Shetland (St. Magnus Bay), which suffered from an unusually strong sea lice burden. The remaining part of the fish where the ISA virus was identified earlier this year was also harvested out in the quarter. The fish farmers in the St. Magnus Bay area have implemented common measures to improve the bio security in the area. The result in Canada is weaker than expected, despite continued high prices. There was a challenging environmental situation in several of the production areas with high algae concentration, as well as low dissolved oxygen levels. This has increased the mortality and also reduced growth. Pacific salmon species were also harvested during Q3 with negative profitability due to lower prices. Due to the strong increase in the supply of salmon from Norway and the consequential reduction in prices, Grieg Seafood stopped harvesting for 6 weeks in both Rogaland and Finnmark during Q3. This causes higher fixed costs and a considerably influences EBIT per kg, in particular in Finnmark. The good underlying development in Rogaland continues, despite the low harvest volume in the quarter. The decrease in market prices for salmon has caused a negative adjustment of biological assets according the IFRS accounting principles. In Q3 this represents a negative figure of 273.5 MNOK. For the first nine months this is positive with 64.7 MNOK. The appreciation of NOK has given a gain on foreign exchange of net 46 MNOK.