Andreas Kvame: "Biology has continued to improve and stabilise, with increased survival across the regions."

Bumper Q3 for Grieg Seafood

Salmon farmer Grieg Seafood has delivered one of its best-ever third-quarter results, turning a NOK 14 million operating loss in Q3 last year into an operating profit of NOK 149m (£12.9m).

Published Last updated

Grieg’s Shetland operation, which is due to be sold to Scottish Sea Farms for £164m subject to approval from the UK’s competition authority, fared well. It made an EBITDA of NOK 53m.

Grieg said the Q3 result was driven by high salmon prices and declining costs in its regions.

“Biology has continued to improve and stabilise, with increased survival across the regions compared to last year,” said chief executive Andreas Kvame in the company’s Q3 report. “The market was surprisingly strong, considering the large volumes harvested in the industry during the quarter, which would normally cause lower prices.”

Grieg Seafood BC had a strong Q3. Click on image to enlarge. Graphic: Grieg Q3 presentation.

Proximity to US

Kvame said that operationally, British Columbia (BC) was a highlight during the quarter, with stable production and high average harvest weights.

“We continued the positive trend of reduced impact by harmful algae blooms. We experienced the full advantage of the region’s close proximity to a strong US market, where we achieved high prices.”

42% bigger harvest

Grieg Seafood harvested 20,479 gutted weight tonnes (excluding Shetland) in Q3, up 42% compared to 14,416 gwt in Q3 2020. In Norway, Grieg harvested 9,908 gwt (Q3 2020: 2,730 gwt) in Finnmark, and 6,282 gwt (5,039 gwt) in Rogaland. The local production arrangements in BC meant Grieg harvested 4,289 gwt – 35% less than the 6,648 gwt harvested in Q3 last year.

Sales revenues from the group’s continuing operations amounted to NOK 1.303 billion, an increase of 43% compared to the same period last year. The price achievement was NOK 58.4 per kg (NOK 52.9).

The average spot salmon price for Q3 2021 was NOK 54.5 per kg, up NOK 7.4 per kg from Q3 2020. Grieg said the difference in achieved price, measured by sales revenue/kg compared to Q3 2020, had a positive contribution to EBIT by NOK 113 million and was positively impacted by strong market conditions for BC.

British Columbia

Although the harvest volume in BC was just 35% lower than in Q3 2020, higher prices meant sales revenues of NOK 341.5m were almost identical to the NOK 341.7m made in Q3 2020.

Seawater performance in BC was good, with the 12-month rolling survival rate increasing from 88% in Q3 2020 to 91% in Q3 2021.

Farming cost in BC decreased from Can$ 8.6 per kg (NOK 59.2) in Q3 2020 to Can$ 8.5 per kg (NOK 59.0) in Q3 2021, despite the lower harvest volume. Cost recognised as abnormal mortality in was NOK 7m (NOK 1.7 per kg, or Can$ 0.2 per kg), compared to NOK 31 million in Q3 2020 (NOK 1.7/Can$ 0.7 per kg).

90,000 tonnes next year

For the company as a whole, the higher harvest volume for the quarter boosted EBIT by NOK 10m compared to Q3 2020, while decreases in operational costs impacted EBIT positively by NOK 51m. On average, the group’s farming costs decreased by NOK 2.5 per kg from NOK 51.2 per kg in Q3 2020 to NOK 48.7 per kg in Q3 2021, and down NOK 2.0 per kg from Q2 2021.

Grieg expects a harvest (ex Shetland) of 25,100 gwt in Q4 2021, 77,000 gwt for the full year 2021 and 90,000 for 2022.