The overall development of Grieg Seafood during the second quarter was as expected. The temporary setback in Finnmark during the first quarter was reversed from minus 3,9 NOK/kg to plus 2,90 NOK/kg.

 

Due to the higher production costs in all regions caused by increase in the prices of feed, energy and interest rates, the overall result for the company was not satisfactory. The cost increases will result in higher than expected production costs in the year classes to be harvested in 2008 and 2009.

 

The seawater production was hampered by lower temperatures, which negatively influenced growth in 3 of 4 regions, and will result in a 7% reduction in our harvest volumes, compared to previous guiding for 2008. The general health situation has improved, and mortality is lower than expected in 3 of 4 regions.

 

The infrastructure investments in smolt production facilities and new seawater production sites develop according to plan.

 

The salmon market in the second quarter has generally been good. Most salmon producers have experience reduced growth, and the market balance has improved. The present economic climate has so far not affected the demand for farmed salmon, which indicates that the higher production costs might be compensated in the marketplace.

 

The planned expansion in production capacity will continue as planned with increased focus on profitability in all regions. The speed of the expansion will be adjusted according to the regional operational performance to ensure that financing is within current credit facilities.