Grieg Seafood earnings plunge in disappointing third quarter

"We are turning every stone to get back on track", vows CEO Andreas Kvame, as company focuses on rebuilding biomass after biological problems this year.
Worker at a Grieg Seafood salmon farm in Norway.
Worker at a Grieg Seafood salmon farm in Norway.Photo: Helge Hansen / Grieg Seafood.

Biological problems have beset Grieg Seafood's operations this year, with low harvest volumes during the third quarter meaning increased costs while the company focused on "rebuilding biomass".

"During the third quarter, Grieg Seafood’s main priority was to let the fish grow and build biomass. As a result, harvest volumes were low, causing increased costs per kilo," said CEO Andreas Kvame, presenting the Q3 results.

Grieg Seafood's biological challenges during 2023 meant a drop in earnings was anticipated, but the reality was far worse than expected. The company reported an unprecedented plunge into the red with operational EBIT loss of NOK -86 million (€7.2M/$7.7M), compared with NOK 145 million (€12.2M /$13M) profit during the same period last year.

Sales revenue also dropped significantly during the quarter, reaching NOK 1.2 billion (€98M/$104.8M) compared with NOK 1.7 billion last year, on the back of Grieg Seafood's harvest volume being cut by almost half, with just 12,245 tonnes produced in Q3. Last year, the harvest volume stood at 22,923 tonnes.

I am not satisfied with the results. We are turning every stone in the regions to get back on track.
Andreas Kvame, CEO of Grieg Seafood

Catalogue of biological problems blight Grieg Seafood's earnings

Grieg Seafood's biological woes included an outbreak of Spiro at its smolt operations in Finnmark, and low harvest weights due to previous ISA outbreaks in Rogaland. The company also suffered seasonal biological issues in British Columbia.

"Unfortunately, these events reduced our price achievement and earnings," said Kvame.

"I am not satisfied with the results. We are turning every stone in the regions to get back on track. Mitigating measures have been implemented, such as vaccination programs against ISA and winter ulcers as well as a UV filter to prevent Spiro from entering our smolt facility."

"Due to the long production cycle of the salmon, it takes some time before we see the effect of the measures. I am encouraged that the underlying biology in Rogaland is good. In Finnmark, the generation of fish transferred to the ocean during 2023 has not been impacted by Spiro and is performing well," Kvame said.

Grieg Seafood has updated its harvest volume guide to 25,800 tonnes for Q4 2023, expecting a total of 76,000 tonnes in harvest volume for 2023 as a whole. For 2024, the company says it expects a total harvest volume of 85,000 tonnes.

"While it has been a tough quarter, a lot of good work has been done to get back in shape. I want to thank all of my hard-working colleagues for their efforts," Kvame said.

Newfoundland milestone the "high point" of the quarter for Grieg Seafood

On a more positive note, Kvame said that Grieg Seafood's new operation in Newfoundland has been a success so far, with the first harvest of fish taking place in October.

"Biological control has been strong, with high survival, good fish health and welfare, good growth, good product quality and no sea lice issues. We look forward to taking the next steps in Newfoundland," Kvame said.

The company also announced it is making significant investments in its post-smolt expansion in Finnmark, in addition to "realizing the Canadian potential" by seeking opportunities for growth in Canada in collaboration with long-term partners.

Kvame said that Grieg Seafood has engaged DNB as financial advisor, and aims to finalise the investment process to expand its Canada operations during 2024.

Related Stories

No stories found.