Grieg chief executive Andreas Kvame experienced a first quarter “unlike anything I have seen before". Photo: Tommy Ellingsen / Grieg.

Grieg sees bright future after record Q1 results

Canada and Norway salmon farmer Grieg Seafood has reported record first-quarter results for what chief executive Andreas Kvame said was a period “unlike anything I have seen before in my 26 years in the salmon farming industry”.

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“The market has been incredibly strong, with historic prices across the board,” said Kvame. “All of our production regions performed well during the quarter, due to improved biological control and increased survival. In Finnmark (northern Norway), we were significantly less impacted by winter ulcers this year compared to 2021, as a result of successful mitigating measures.

“We are also seeing a positive impact from our integrated sales organisation, which has since its establishment changed focus in sales from margin to company profits.”

The numbers look good for Grieg BC, with profits up and costs down. Click image to enlarge. Table: Grieg Q1 report.

Better biology

The company’s two Norwegian production areas, Rogaland and Finnmark, contributed 88% (Q1 2021: 94%) to the Q1 harvest volume of 16,916 (13,583) gutted weight tonnes, while 12% (6%) originated from British Columbia.

Grieg’s group operating profit before production fee and fair value adjustment was NOK 453 million (Can $60m), driven by high prices and improved biological performance. In the same period last year, Grieg made an operating loss of NOK 16m. Group EBIT/kg was NOK 26.8 (-1.2).

In British Columbia, Grieg harvested volume of 2,096 gutted weight tonnes (Q1 2021: 853 gwt), and EBIT per kilo was NOK 34.3 (NOK 1.1).

Good prices

The west Canada operation reported good price achievement driven by a favourable harvesting profile and a premium for value-added products.

Farming cost in BC was Can $7.8 per kilo, down from $8.8 in Q1 2021 and $9.4 in Q4 2021 due to harvesting from sites with good biological conditions and increased survival.

The expansion of Grieg BC’s Gold River smolt facility was completed, taking capacity from 500 to 900 tonnes.

More capacity in Newfoundland

On the other side of the country, Grieg has been awarded the exclusive right to develop a new farming area in Bays West on the south coast of Newfoundland, with a harvest potential of 15-20,000 tonnes.

The area is to the west of Placentia Bay, where Grieg also has exclusive farming rights, and increases the company’s total harvest potential in Newfoundland to 65,000 tonnes.

Grieg has been growing fish at a hatchery and smolt facility in Marystown, NL, and the first transfer of smolts into pens in Placentia Bay is due to take place this month, with the first harvest late next year.

Strong market

Grieg expects to harvest 68,000 gwt in Norway this year and a further 22,000 gwt in BC. The company is targeting a harvest volume of 130,000 gwt by 2025.

“The Covid-19 pandemic has impacted the salmon market the last two years, with shift in demand from Horeca (hotels, restaurants, catering) to the retail segment,” wrote Grieg in its report.

“The Horeca segment is on recovery, and it also seems that the pandemic has increased the demand in the retail segment, as consumers have become used to cooking salmon at home. With no supply growth in 2022 and outlook for continuing strong demand, we expect a strong market going forward.”