November 4, 2011

Norwegian Grieg Seafood's net loss rises in Q3

Norwegian Grieg Seafood's net loss rose to NOK121.4 million (US$21.3 million) in the third quarter of 2011 from NOK14.2 million (US$2.5 million) a year earlier because of poor prices and robust supply growth.

According to a poll by Reuters, a net loss of NOK1 million (US$178,000) was expected.

The pre-tax loss also widened to NOK168.3 million (US$30.04 million) from NOK18 million (US$3.2 million), while the market consensus was for a loss of NOK2 million (US$357,000).

In the reporting period, Grieg Seafood booked value adjustment of the biomass of a negative NOK120.4 million (US$21.5 million).

The company moved to operating loss before value adjustment of the biomass of NOK30.7 million (US$5.5 million) from an operating profit pre fair value adjustment of NOK105.1 million (US$18.8 million). The item was expected at NOK10 million (US$1.8 million).

The operating revenue dropped to NOK467.1 million (US$83.4 million) from NOK586 million (US$104.7 million), also failing the average analyst expectations for NOK481 million (US$86 million).

The third-quarter harvest volume of 15,663 tonnes was below the company's guidance for 16,000 tonnes.

For 2011, Grieg Seafood expects a harvest volume of 63,300 tonnes and of 69,000 tonnes in 2012.

Due to the low salmon prices and market outlook, Grieg Seafood has started a reduction in investments, reduced smolt entries and will continue reviewing further capital reduction moves.