Highlights
- EBIT NOK 351 million (NOK 151 million), EBIT per kg NOK 14.81; up 84% from to Q4 2017
- Earnings driven by high prices and cost reduction per kg
- Harvest volume of 24 000 tonnes (+27%) driven by strong biological performance in Norway
- Good production with high average harvest weight in BC, continued high cost due to challenges in previous quarters
- High cost in Shetland due to continued biological challenges
- Awarded A- by the Carbon Disclosure Project on actions related to Climate Change
- Expected harvest volume of 82 000 tonnes (+10%) in 2019
Financial results
The Grieg Seafood Group harvested 23 682 tonnes GWT in Q4 2018, compared to 18 667 tonnes in Q4 2017, compared to 18 667 tonnes in Q4 2017.
The average realized price for Grieg Seafood was up by NOK 5.55 per kg compared to Q4 2017.
Grieg Seafood's total operating income in Q4 2018 amounted to NOK 2 128 million, an increase of 23% compared to the same period last year .
The farming cost (total cost related to fish harvested this quarter) increased by NOK 0.43 per kg compared to the same quarter last year. This is mainly related to high cost of harvested fish in BC and on Shetland that was affected by harmful algal bloom (HAB) and gill-related diseases.
The Group's EBIT before fair value adjustment of biological assets was NOK 351 million during the quarter, compared to NOK 151 million in the same quarter of 2017. EBIT per kg amounted to NOK 14.81 for the period, up from NOK 8.07 in Q4 2017.
In 2018 the Grieg Seafood Group's operating income totaled NOK 7 552 million, compared to NOK 7 038 million in 2017. Higher prices and volumes contributed positively. Total harvest volume for the year was 74 623 tonnes GWT, up from 62 598 tonnes GWT in 2017.
EBIT per kg was NOK 14.72, compared to NOK 14.45 in 2017. EBIT per kg was positively affected by the large harvest volume and high spot prices, however the cost related to pancreas disease (PD), HAB and gill diseases during the year had a negative impact, both in terms of high cost and price achievement. Total farming cost per kg for the Group was NOK 43.1, NOK 0.7 above our targeted cost of NOK 42.4 for the year.
Commenting on the Group's performance, CEO Andreas Kvame, said:
"Q4 2018 ended a strong year for Grieg Seafood in which we reached our last guiding harvest volume of 75 000 tonnes - an increase of 20% compared to 2017 - and revenues of more than NOK 7.5 billion. This was achieved by maintaining a strict focus on sustainability and driving forward improvements to our farming operations.
Throughout the year we introduced several initiatives, including advanced sensor- and monitoring systems across our four regions. In September we opened a new operations center in Rogaland, supporting our digitalization strategy utilizing big data analytics to improve overall operational performance.
We are proud of receiving the second highest grade by the Carbon Disclosure Project, which scores companies based on their work to cut carbon emissions. With improved operations and by maintaining a strict focus on sustainable farming and on securing fish welfare, we are well prepared to continue executing on our growth strategy, targeting 100 000 tonnes in 2020 with cost at or below industry average"
Strategic priorities
Grieg Seafood's objective is to ensure sustainable growth in the years ahead by combining skilled and motivated people, new technology and to increasingly farm salmon on nature's terms. The goal is to increase sustainable production to reach an annual harvest volume of 100 000 tonnes in 2020. We are also aiming for production cost at or below weighted industry average, targeting NOK 37.90 per kg by 2020. In Norway, the target is NOK 36.00 per kg by 2020.
To ensure progress towards our goal for sustainable growth, we have initiated the GSF 2020 improvement program, with specific targets and initiatives for each region. The program contains four strategic priorities; 1) digitalization 2) post-smolt strategy 3) biosecurity and fish welfare 4) expansion opportunities
Through its digitalization strategy "GSF Precision Farming," Grieg Seafood intends to take a leading role in utilizing new technology, big data and artificial intelligence to improve operational efficiency through reduced environmental impact, increased fish welfare and improved growth.
With a strict focus on biosecurity and fish welfare, Grieg Seafood aims to achieve strong biological performance through the implementation of a broad range of technological and operational initiatives, including large smolt, GSF Precision Farming and other preventive operational measures aimed at combating sea lice and algae. The group targets an average survival rate in seawater above 93%. In 2018, average survival rate was 91%.
Outlook
The global supply of Atlantic Salmon for 2019 is expected to increase while demand growth is expected to remain stronger than supply growth, contributing to continued good prices going forward.
Grieg Seafood expects to harvest approximately 82 000 tonnes in 2019, an increase of 10% from 2018. The expected harvest volume for Q1 2019 is 13 200 tonnes.
Results presentation
CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results later today at 09:00 CET at Hotel Continental, Stortingsgaten 24/26, Oslo.
The presentation and subsequent Q&A will be held in Norwegian and can be followed live via webcast at www.griegseafood.com or at the following link: http://webtv.hegnar.no/presentation.php?webcastId=97603010
An English transcript of the presentation will be made available at www.griegseafood.com within a few days after the presentation.
For further enquiries, please contact:
Andreas Kvame, CEO
Cell phone: +47 907 71 441
Atle Harald Sandtorv, CFO
Cell phone +47 908 45 252
About Grieg Seafood
Grieg Seafood ASA is one of the world's leading salmon farmers, specializing in Atlantic salmon. The Group has an annual production target of 100 000 tonnes gutted weight in 2020.
Our farming facilities are in Finnmark and Rogaland in Norway, British Columbia in Canada and Shetland in the UK. Approximately 780 people are employed by the Group. Grieg Seafood ASA was listed at the Oslo Stock Exchange in June 2007. Our headquarters are situated in Bergen, Norway. The business development of Grieg Seafood ASA focuses on profitable growth, sustainable use of resources and being the preferred supplier to selected customers.
To learn more, visit www.griegseafood.com
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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