Grieg Seafood CEO Andreas Kvame.
Photo: Grieg Seafood webcast.
Grieg Seafood has suffered a dramatic fall in its share value in recent days, following release of the group's second-quarter report which showed the company had plunged into the red.
The company reported an operational EBIT loss of NOK 35 million (EUR 3.0 million / USD 3.3 million), a sharp decline compared to a profit of NOK 547 million (EUR 47.4 million / USD 50.6 million) in the same period last year.
The value of Grieg shares dropped by a whopping -21.66% over the past five days, plummeting from NOK 64.25 (EUR 5.88 / USD 6.31) on Friday, August 16, to NOK 49.21 (EUR 4.50 / USD 4.83) on Friday 23 August, according to Oslo Bors figures.
The company reported an exceedingly tough set of results for the second quarter of 2023, with a series of biological and environmental challenges across its global operations in both Norway, where it has been affected by parasites and jellyfish, and British Columbia, Canada, where low dissolved oxygen levels resulted in increased mortality rates and reduced growth.
As a result of this, Grieg expects to make an operational EBIT loss during the third quarter in BC, estimated at between NOK 230-250 million (EUR 19.9-21.7 million / USD 21.3-23.1 million).
This pessimistic financial outlook, coupled with the uncertainty over the future of net pen salmon farming in British Columbia, appears to have made the most impact on the stocks.
Norwegian business news outlet E24 reported that "a big bang is expected in Canada" in Q3, and quoted Arctic Securities analyst Christian Olsen Nordby as calling the results a "disaster report", and predicting "it will be difficult for the company to make a profit" in the second half of 2024.