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Global harvest of Atlantic salmon in 2022 is expected to be in line with 2021 with no global supply growth for the rest of 2022, and limited growth in 2023, according to Grieg Seafood Q3 2022 report. Although, leaves space for a continued strong salmon market going forward.

In addition, Grieg Seafood has put investments totaling NOK 2.3 billion on hold until a final Norwegian tax proposal is adopted. Once a final proposal is adopted, the company will assess the impact on the company’s strategy and plan.

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Over the last years, Grieg Seafood have been able to reduce the underlying farming costs through operational improvement initiatives. However, the general cost inflation, and high feed price in particular, are expected to continue to impact farming costs in the short to medium term. Grieg Seafood will continue to benchmark cost to its competitors to ensure the company’s competitive strength.

Regarding all this, Andreas Kvame, CEO of Grieg Seafood ASA, said: “Grieg Seafood have previously identified large investment opportunities in our coastal communities in Norway aimed at advancing sustainable growth. However the proposal in its current form will significantly reduce available capital necessary for these investments.”

Besides, he noted: “Therefore, all new investments that are impacted by the tax are put on hold. The proposal and the uncertainty caused by the political process in which it was launched show how geographical diversification has become even more important to reduce risk in the industry. Grieg Seafood is together with the industry. Working to ensure that Norway remains competitive within the global salmon farming industry, with a stable and attractive investment climate.”

Outlook

Generally, Grieg Seafood targets an annual contract share of 20-50%. Estimated contract share for the Norwegian operations in Q4 2022 is 32% and 23% for the full year 2022. In the fourth quarter of 2022, expected harvest volume is 17,500 tonnes, distributed as follows:

Rogaland: 6,500 tonnes
Finnmark: 9,800 tonnes
BC: 1,200 tonnes

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The company now guides for a harvest volume of 81,000 tonnes in 2022. Down from the previously guided level 87,000 tonnes. For 2023, the company guides for a harvest volume of 87,000 tonnes, distributed as follows:

Rogaland: 29,000 tonnes
Finnmark: 33,000 tonnes
BC: 20,000 tonnes
NL: 5,000 tonnes

Finally, Kvame added: “While the market and demand for salmon was strong for the season, the third quarter has been somewhat challenging. Our farming operations were impacted by unfavorable growth conditions and sea lice pressure in Rogaland and Finnmark, as well as algae blooms in BC. Seawater production in Newfoundland is developing according to plan.”

Grieg Seafood aspires annual harvest volume of 120-135,000 tonnes in 2026. This depends on the successful utilization of current capacity, available expansion opportunities, and new concepts.

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