Operating profit before fair value adjustment in the fourth quarter of 2021 more than doubled compared to the fourth quarter of 2020
Strong demand for seafood products, better prices obtained for the group’s main products and an improvement in underlying operations appear as the driving factors behind this record activity. The result? A significant improvement in earnings in all segments compared to the same period in 2020, resulting in reported revenue of NOK 6519 million in the quarter, up 26 % from the fourth quarter of 2020.
Henning Beltestad, CEO of Lerøy Seafood Group, is optimistic about the future. “There is a positive development in activity level and prices realised. Compared with Q4 2020, earnings have increased in all segments”, he says. He goes further: “We are reporting an all-time high revenue of NOK 23 billion for full-year 2021. Our vertically integrated value chain has proved resilient, and the development is in line with the group’s growth strategy”.
Wild catch and whitefish segment
The wholly owned subsidiary Lerøy Havfisk carries out the group’s wild catch operations. Despite increased costs, especially fuel, higher catch volumes and higher prices achieved for the principal species are the main drivers for the higher catch value in Q4 2021 compared to Q4 2020. Onshore, Lerøy Norway Seafoods core business is the processing of that wild-caught whitefish. Due to rising raw material prices, processing whitefish in Norway has been a major challenge in recent times, however, earnings in the fourth quarter of 2021 again were higher than in the fourth quarter of 2020.
Beltestad explains: “Earnings in Wild Catch in the fourth quarter improved significantly on the same quarter in 2020, driven by high catches and higher prices. We’ve seen significant operational improvements in the onshore industry in 2021. There is still substantial potential in developing the demand for whitefish”.
LSG Farming segment comprises the group’s three aquaculture regions in Norway: Lerøy Aurora, located in Troms and Finnmark; Lerøy Midt, located in Nordmøre; and Trøndelag and Lerøy Sjøtroll, located in Vestland. Its operating profit before fair value adjustment related to biological assets was NOK 702 million in the fourth quarter of 2021, compared with NOK 296 million in the fourth quarter of 2020.
Lerøy Seafood Group’s CEO continues: “The Farming segment posted satisfactory results for the quarter. At the same time, growth in recent months has been slightly lower than expected, and we’re reducing our harvest guidance for 2022 for the Farming segment in Norway from 190,000 GWT to 185,000 GWT”. So, we will have to be very attentive to the evolution of their segment in the aquaculture industry in the coming months.
Value-added Processing, Sales and Distribution segment
As COVID-related restrictions were lifted, in the second half of 2021, demand for seafood returned to historically high levels, driven in particular by strong demand in the retail sector but also by the gradual positive development in the HoReCa segment.This means that, despite being affected by the start-up costs of the group’s new factories in Spain and Italy, the segment’s underlying development is good. In total, operating profit before fair value adjustment of biomass reported by the segment in Q4 2021 was NOK 202 million, up from NOK 176 million in the same period in 2020. That means that, for the first time, VAPS&D is reporting revenue over NOK 20 billion for the year.
Henning Beltestad, CEO of Lerøy Seafood Group, explains it: “We have continued to develop, and are proud of reporting the highest level of activity and earnings in the segment’s history. Our vertically integrated value chain and proximity to end customers have served us well under challenging market conditions”.
Lerøy Seafood Group, 5 million meals every day
Lerøy Seafood Group ASA is a global seafood corporation with its head office in Bergen, Norway. Their approximately 5,500 employees process between 350,000 and 400,000 tonnes of seafood every year via their value chain. That means around 5 million meals every day, all of them delivered under the group’s goal of creating the world’s most efficient and sustainable value chain for seafood.