August 30, 2023

 

Grieg Seafood's Q2 earnings witness decline due to ongoing biological challenges

 

International aquaculture company Grieg Seafood has announced a significant decline in its second quarter operating profit (EBIT) for 2023, citing persistent biological health challenges, Fish Farmer reported.

 

The company's Q2 EBIT plummeted from NOK 986 million (~US$93 million; NOK 10 = US$0.94) in the previous year to NOK 547 million (~US$51.6 million) this quarter. Despite this setback, Grieg continues its operations in Norway, Newfoundland, and British Columbia, Canada, following the divestment of its Scottish business over the past two years.

 

Although the second quarter maintained a robust income of NOK 2.372 billion (~US$223 million), compared to NOK 2.351 million (~US$221 million) the previous year, profits were hampered by ongoing biological issues. The most pronounced impact was observed in Norway's Finnmark region, where the harvest declined by 4,270 tonnes to 5,573 tonnes. In contrast, the situation in Rogaland demonstrated marked improvement, with the harvest more than doubling to 11,536 tonnes.

 

Challenges such as infectious salmon anaemia (ISA) and the parasite Spironucleus salmonicida persisted into the second quarter, afecting the projected annual harvest total.

 

Andreas Kvame, chief executive officer of Grieg Seafood, acknowledged the overall strength of the salmon industry during Q2, attributed to robust demand and elevated prices, resulting in heightened revenues. Kvame acknowledged the challenging biological conditions, particularly in the Finnmark region.

 

He said that despite the challenges, Grieg Seafood has implemented a comprehensive array of measures in Q2 to address these issues, and they are witnessing encouraging outcomes in their Norwegian operations.

 

Kvame said that enhanced biological control, combined with the strategic transfer of larger smolt and reduced ocean production time, lays the foundation for improved fish welfare, performance, and growth in forthcoming quarters.

 

In addition to tackling biological challenges, Grieg Seafood is navigating regulatory and market dynamics. Kvame commented on the resource (ground rent) tax in Norway, expressing a commitment to comprehending its implications while identifying opportunities in Canada.

 

Progress is evident in the Newfoundland greenfield project, which aligns with established plans, with the inaugural harvest projected for Q4 2023. In British Columbia, the company collaborates with governmental initiatives to advance industry practices, focusing on sustainable solutions through constructive dialogue.

 

-      Fish Farmer