Lerøy Seafood operating profit drops in second quarter

Lerøy Seafood Group reported lower earnings and revenue in the second quarter of 2026, as reduced salmon and trout harvest volumes and weaker profitability in Market Operations impacted its results, despite the company seeing improved farming costs and stronger cash flow.

Operational EBIT fell 16% year-on-year to NOK 574 million (EUR 52.7 million/USD 61.6 million), from NOK 680 million in the same quarter of 2025. Meanwhile, revenue also declined 11% to NOK 7.89 billion (EUR 724.9 million/USD 847.8 million), according to the company's Q2 report.

"The decline is due to lower harvest volumes and weaker margins in Market Operations (previously VAP, Sales and Distribution) than in a historically strong 2025. At the same time, we are seeing strong biological performance and declining costs in Farming, delivering strong cash flow and increasing our expectations for Wild Catch for the year," said CEO Henning Beltestad, via a press release announcing the results.

Operational EBIT from Lerøy's Farming segment declined 8% to NOK 236 million (EUR 21.7 million/USD 25.3 million), compared with NOK 256 million during the same period in 2025.

Salmon and trout harvest volume was 44,747 tonnes gutted weight (GWT), also down 8% year-on-year.

Despite the lower volume, Lerøy said its biological performance remained strong and farming costs continued to decline. Its Q2 report states that farming costs reached their lowest level since the fourth quarter of 2023. Operational EBIT per kg was NOK 5.3, slightly above NOK 5.2 a year earlier.

"We have very high survival rates and strong biology. Cost levels in Farming have declined significantly since the first quarter of 2026. Going into 2027, feed costs will increase, but the effect of the cost optimisation programme will significantly reduce the impact of this," Beltestad said.

The group maintained its 2026 Norwegian harvest guidance at 195,000 tonnes GWT, although it increased its forecast for Lerøy Aurora and reduced expectations for Lerøy Sjøtroll. According to the company, the adjustment reflects strong development in northern Norway, while very low sea temperatures have restricted growth at Lerøy Sjøtroll.

Lerøy said Aurora and Lerøy Midt both improved their EBIT per kg year-on-year, while Sjøtroll was affected by trout price realisation.

Trout accounted for 23% of the group's harvest volume during the quarter, compared with 20% a year earlier.

Market Operations, previously reported as Value-Added Processing, Sales and Distribution, posted operational EBIT of NOK 269 million (EUR 24.7 million/USD 28.9 million), down 23% from NOK 351 million achieved in Q2 2025.

The business segment's operating margin nevertheless improved to 3.5%, from 2.4% in the first quarter of this year. Lerøy said the first-half profitability was affected by less favourable contract positions, lower volumes and a stronger Norwegian krone, but expects "a significant improvement" during the second half of 2026.

The group has also changed the way it reports on its different business segments, moving primary processing activities previously included in Farming into Market Operations. Lerøy said the accounting change reduced reported Farming EBIT and increased Market Operations EBIT by NOK 22 million (EUR 2.0 million/USD 2.4 million) in the second quarter, without affecting group-level earnings.

Meanwhile, Wild Catch operational EBIT reached a total of NOK 140 million (EUR 12.9 million/USD 15.0 million) during the second quarter, compared with NOK 148 million a year earlier.

Lerøy reported its catch volume increased 6% to 18,779 tonnes, while the first-half operational EBIT for Wild Catch rose 24% to NOK 368 million (EUR 33.8 million/USD 39.5 million), despite catch volumes for the six-month period being 10% lower year-on-year.

Lerøy said price realisation remained strong for key whitefish species. Its report shows year-on-year price increases of 24% for cod, 42% for saithe and 35% for haddock during the quarter. The company also noted improved profitability at its Lerøy Norway Seafoods land-based processing operations.

As a result, Lerøy has raised its forecast for 2026 Wild Catch operational EBIT to NOK 400-450 million (EUR 36.7-41.3 million/USD 43.0-48.3 million), from its previous guidance of NOK 350-400 million.

"Price realisation for our key species remains strong, and we are seeing clear results from the improvement work in the land-based industry," Beltestad said.

Meanwhile, during the quarter the group saw its operating cash flow rise to NOK 1.35 billion (EUR 124.2 million/USD 145.3 million) an increase of just over 30% from the NOK 1.03 billion logged during the same period last year.

Lerøy said it has so far realised NOK 402 million of its NOK 1 billion cost-reduction programme, with a further NOK 521 million of measures identified and under implementation.

For the full year, the group continues to expect a Norwegian salmon and trout harvest of 195,000 tonnes GWT. Including its 50% share of Scottish Sea Farms, total harvest volume is forecast at around 217,000 tonnes GWT.

Lerøy said it expects global salmon and trout supply growth to slow significantly during the second half of 2026 following several quarters of strong growth, while demand continues to increase across most of its main markets.

"We enter the second half of the year with a strong biological status, positive cost development, good cash flow and a market that is gradually tightening. Together with the effects of the cost programme, this provides a good foundation for further value creation," Beltestad concluded.