Grieg Seafood ASA has announced a major transformation program alongside its Q4 and preliminary full-year results for 2024, as the company refocuses on profitable growth in Norway while scaling back its ambitions in Canada.
The move follows a particularly bad year for Grieg Seafood, as it reports a full-year operational EBIT of NOK 8 million (EUR 0.69m / USD 0.72m), a whopping 98.97% drop from the NOK 780 million (EUR 67.3m / USD 70.2m) it achieved in 2023.
The company also reported an operational loss of NOK 74 million (EUR 6.4m / USD 6.7m) for the fourth quarter of 2024, compared to a NOK 67 million (EUR 5.8m / USD 6m) loss in the same period of 2023.
The restructuring, the company said, includes financial measures aimed at strengthening Grieg’s balance sheet, in addition to operational improvements to reduce costs.
"We are currently not capturing the value potential that lies in our assets
and our operations, and we need to manage a financial and operational
transformation to realize these values going forward," said CEO Andreas Kvame, in a stock exchange announcement.
Kvame said the company would now reallocate resources to its Norwegian operations in Rogaland and Finnmark, where it expects a 14% growth in harvest volumes in 2025. Meanwhile, Grieg is significantly reducing its investment plans in Canada, particularly in Newfoundland, and has placed strategic investments on hold in British Columbia pending regulatory clarity on salmon farming.
"We are taking upfront action to strengthen our balance sheet and
financial flexibility, and doubling down on our operational and financial
improvement programs," Kvame remarked.
"We have a fundamentally strong asset base, and with operational improvements and financial discipline we are going to drive sustainable and profitable growth and shareholder value creation going forward," Kvame added.
Grieg's performance in 2024 was particularly impacted by uncertainty in Canada, following the news that Canadian authorities planned to phase out open net-pen salmon aquaculture in British Columbia by 2029.
"Changes in operational, industry, economic, and regulatory conditions have led to changes in future plans, assumptions, and estimates for the Canadian operations, and the company has recognized impairment losses in excess of NOK 1.7 billion (EUR 146.6m / USD 153m) to reflect these changes," the company stated.
Of this, Grieg said that around NOK 1 billion (EUR 86m / USD 90m) was related to intangible assets, with a further NOK 0.7 billion (EUR 60m / USD 63m) accounting for property, plant, and equipment. The company said that this translates into a total EBIT loss of NOK -1.56 billion (EUR -134.6m / USD -140.4m) in Q4 and NOK -2.31 billion (EUR -199.3m / USD -207.9m) for the full year 2024.
In a bid to improve its financial flexibility, Grieg Seafood has announced it is considering issuing a perpetual green hybrid bond valued between NOK 1.5 - 2.0 billion (EUR 129-172m / USD 135-180m), subject to market conditions. The proceeds will be used to finance or refinance green projects, as defined in the company’s Green Bond Framework.
Grieg Seafood said it has appointed Arctic Securities, DNB Markets, and Nordea as joint bookrunners, with DNB and Nordea also acting as green bond advisors, to arrange fixed income investor meetings starting 21 February 2025.
The company is also in discussions for the sale-leaseback of its smolt and post-smolt facilities in Adamselv, Finnmark.
Grieg said the measures, along with its planned operational and financial improvement programs, are expected to generate a liquidity effect of approximately NOK 2.5 billion (EUR 215.7m / USD 225m) and reduce net interest-bearing debt by NOK 1.5–2.2 billion (EUR 129-189m / USD 135-198m).
Despite 2024's financial and operational challenges, the company reports its total harvest volume increased to 77,704 tonnes in 2024, up from 72,015 tonnes in 2023. Q4 harvest volume stood at 23,551 tonnes, an increase from 21,767 tonnes in the same quarter of 2023.
Grieg Seafood said it has entered 2025 with near-maximum biomass capacity in Norway and forecasts an increase in Norwegian harvest volumes to 62,000 tonnes.
However, in Canada, due to regulatory uncertainties and what the company describes as taking "a more cautious approach", harvest volumes are expected to decline by 5% to 22,000 tonnes.
For Q1 2025, Grieg projects a total harvest volume of 18,800 tonnes, with 6,500 tonnes from Rogaland, 7,600 tonnes from Finnmark, and 4,700 tonnes from Newfoundland. British Columbia is expected to have no harvest in Q1.
For the full year 2025, Grieg Seafood targets a total harvest of 84,000 tonnes. Of this, the company expects 62,000 tonnes to be produced in its Norwegian operations, with 30,000 tonnes projected for Rogaland, 32,000 tonnes for Finnmark. In Canada, Grieg said it expects to produce 12,000 tonnes in British Columbia and 10,000 tonnes in Newfoundland.
Grieg said it expected a continued "robust market" for salmon in 2025, although it noted that "The potential imposition of tariffs on goods exports into the US adds uncertainty, particularly with regards to exports from the company's operations in Canada."
