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Lerøy blames higher costs for lower operating profit

Higher fish farm costs impacted on earnings for Lerøy Seafood Group.
Higher fish farm costs impacted on earnings for Lerøy Seafood Group.

Scottish Sea Farms co-owner Lerøy Seafood Group (LSG) achieved revenues of NOK 5,340 million in the second quarter of 2019, compared with NOK 5,04m in the same period in 2018.

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Operating profit before value adjustments related to biological assets was NOK 774m in Q2 2019, (Q2 2018; NOK 1,000m).

Lower aquaculture earnings, driven by lower price attainment and higher costs, were the main causes of lower earnings.

Operating profit per kilo before biomass adjustment was NOK 19.0 compared to NOK 23.4 in the same period last year.

First-half results

Revenue for the first half of 2019 was of NOK 10,086 million, compared with NOK 10,042m in the first half of 2018.

Operating profit before fair value adjustment related to biological assets for the first half of 2019 was NOK 1,465m (NOK 1,960m).

The profit before tax and fair value adjustment related to biological assets for H1 2019 was NOK 1,524m ( NOK 2,038m).

“In terms of earnings, the second quarter figures are in line with the expectations we had going into the quarter,” said chied executive Henning Beltestad

‘Potential to do better’

“However, we know that we have the potential to do better and that our skilled employees are doing their utmost to exploit this potential to the full,” confirms CEO Henning Beltestad.

“We have made several major investments in [the farming division] in recent years. The results of these, however, are not immediately obvious as the projects have long lead times.

“Release from stock costs are too high in the second quarter, but we expect to see an improvement in the second half of the year and into 2020.” 

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