August 24, 2012
Leroy Seafood experiences lower profits for Q2
Leroy Seafood suffers a drop in operating profit before value adjustment of biomass, due to the substantially lower prices for its main products.
The firm had a turnover of NOK2.3 billion (US$394 million) the second quarter of 2012 -- on the same level as Q2 2011. The operating profit before fair value adjustment of biomass was NOK137.7 million (US$24 million)
As a result of very good growth as well as lower feed prices, the underlying production costs experienced only a slight drop. The good growth has also materialised in record-high harvest volumes for the season.
As a result of considerably lower prices and higher costs for released-from-stock products, the associated company, Norskott Havbruk achieved lower net earnings in Q2 2012 versus Q2 2011. Income from associated companies before fair value adjustment of biomass thus fell to NOK7.5 million (US$1.3 million) in the second quarter of 2012.
The profit before tax and fair value adjustment of biomass in the second quarter of 2012 was NOK123.4 million (US$21.1 million).
In the first half of 2012, Leroy Seafood had a turnover of NOK4.47 billion (US$76 million), a decline from H1 of 2011. The decline was reduced to only 3.3% despite the strong drop in prices for salmon and trout.
The Group's operating profit before fair value adjustment of biomass was NOK240.8 million (US$41.2 million). The Group's operating margin before fair value adjustment of biomass was 5.4% compared with 19.2%.
In H1 2012, the Group generated an operating profit after fair value adjustment of biomass of NOK246.2 million (US$42.2 million). The Group's profit before tax and before fair value adjustment of biomass was NOK212.8 million (US$36.4 million) in the first half of 2012.
"The strong growth in global supply of Atlantic salmon experienced the last couple of years is expected to decrease during the second half of the year. The price level faced by the business over the last 12 months has contributed to a very strong development in demand," the company wrote.
"Good demand together with expectations for improved productivity in the Group's production facilities, including improved biology, provides justification for the Board's positive attitude towards the Group's development. The Board of Directors currently anticipates a stronger result for the second half of 2012 than was achieved in the first half of 2012," the group added.