Highlights - second quarter 2012

• Further strong increase in global supply.
• Sound increase in demand in most markets.
• Good biological and cost-side development in Norway and Canada.
• A weak result and high costs in Shetland due to a weak biological production.
• EBIT before fair value adjustment of biomass was NOK 13.7m in the second quarter (NOK 142.9m in 2011).
• EBIT before fair value adjustment of biomass was NOK 18.6m in the first half-year (NOK 274.5m in 2011).
• The harvested volume in the second quarter increased by 15.1% to 16 437 tons.

Results second quarter 2012
In the second quarter, Group EBIT before fair value adjustment of biomass was NOK 13.7m, compared with NOK 142.9m in 2011. The harvest volume in second quarter was 16,437 tons, an increase from 14,282 tons (+15.1%). This is in line with the previous guiding. The decline in profits was due to a decline in salmon prices from the second half of 2011. Realised prices in the second quarter were 24% down on the corresponding period in 2011, while prices were relatively stable compared to first quarter 2012.

The market development in the second quarter was largely similar to the trend in the first three months of the year, with supply-side growth remaining high, driven by Norway and Chile. At the same time, the market remained strong and showed itself capable of absorbing the historically high increase in supply. On the whole, prices in the second quarter were on a par with prices in the first quarter, but substantially lower than in last year's second quarter. 

2012 started with high sea temperatures which resulted in high production in the first three months of the year, but normal production conditions normalised again in the second quarter.

A negative EBIT before fair value adjustment of biomass of NOK 27.4m in Shetland (UK) is very weak and unsatisfactory, and is due to the biological challenges which were pointed out in the first quarter report. As well as high production costs, weak biological production has also resulted in an unfavourable size distribution which has led to lower realised prices. The period has been characterised by a good biological and operational development in the two Norwegian regions and in BC, Canada. The development and level of costs in Rogaland has been especially gratifying. With a total EBIT before fair value adjustments of NOK 3.1 per kg, the three other regions record a satisfactory result under the current market conditions and we are seeing effects of measures taken over the past years to reduce the cost of production.

The Group's operational EBIT before fair value adjustments of biomass was 0.83 NOK/kg (10.01 NOK/kg). Rogaland achieved an EBIT of 4.68 NOK/kg (13.74 NOK/kg), while Finnmark had an EBIT of 2.11 NOK/kg (13.08 NOK/kg). The EBIT in Shetland reached -8.89 NOK/kg (2.14 NOK/kg), while in Canada the EBIT reached 1.10 NOK/kg in 2012 compared to 7.00 NOK/kg in 2011. The Norwegian sales company, Ocean Quality AS, shows solid improvement and reached an EBIT of NOK 23.4m (3.6%) compared to NOK 4.3m (0.5%).

At the end of the first quarter 2012 the equity ratio stood at 40.8% (45.3%), while net interest-bearing debt totalled NOK 1 376m, a reduction of NOK 63m from first quarter 2012.

Outlook
This year's second quarter was yet another quarter characterised by a strong increase in global supply. The overall increase in supply was close to 30%, following the first quarter when the figure was 33%. The positive trend in demand was maintained in the second quarter and the market continues to absorb the strong increase in supply very well. There is good growth in both the major, established salmon markets and the emerging new markets. 

The strong increase in supply that has taken place over the last 12 months is expected to gradually slow down in the second half of 2012, according to current forecasts. Combined with the strong underlying trend in demand, this is likely to result in better market equilibrium towards the end of this year and into 2013. 

The third quarter accounts will include a one-time charge related to identification of the IHN virus at Grieg Seafood BC and the subsequent culling of the fish at the plant. The book value of the biomass at the site stood at appr. NOK 9m at the time of the cull. The final one-off charge will depend on potential from insurance and/or the authorities that issued the order to cull the site.

The cost level in Grieg Seafood Hjaltland (UK) has been extraordinarily high in the first half of 2012, but is expected to be reduced from mid-August 2012 as harvesting commences from a new generation with a considerably lower cost level.

Grieg Seafood expects a harvest volume of 70 000 tons in the current year, compared with 60 082 tons in 2011. The harvested volume in the second half of 2012 is therefore expected to be 35 355 tons, against 33 921 tons in the same period last year (+4%). This year's harvest volume has been slightly reduced due to weaker production in Shetland and a market related shift of volumes to 2013 in BC. Adapting to market developments and/or product optimisation can lead to both quarterly and yearly shifts of harvest volumes

For further information, please contact:

- CEO Morten Vike (cell phone: +47 994 911 65)
- CFO Atle Harald Sandtorv (cell phone: +47 908 45 252)

For more information, please see www.griegseafood.no.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.