Highlights - second quarter 2013

• A very strong market and global prices at a good level. The decline in the global supply growth of salmon has continued and good demand has been maintained.
• EBIT before fair value adjustment of biomass was NOK 133.7m in the second quarter (NOK 13.7m in 2012).
• EBIT before fair value adjustment of biomass was NOK 184.8m in the first half-year (NOK 18.6m in 2012).
• A strong result in Norway (NOK 11.85 per kg), in particular in Finnmark.
• The cost level in Canada and Scotland is higher due to biological events in previous periods.
• Implemented measures in Shetland have improved the biological status.
• The harvested volume in the second quarter was 14 397, reflecting a decline of 12.4% for the Group, but an increase of 19% in Norway.
• Strong cash flow from operations in the quarter, NOK 156.8m.

Results second quarter 2013
Group operating profits before fair value adjustment of biomass totalled NOK 133.7m in the second quarter, an increase on NOK 13.7m in the same period last year. In the first half of the year the corresponding operating profit of NOK 184.8m reflects an increase on last year's figure of NOK 18.6m.  The harvested volume in the second quarter was 14 397 tons, in line with previous guiding. The improvement in profits is entirely due to higher prices. The harvested volume in the first half of 2013 was 28 112 tons lower than last year was with 28 095 tons, 18.9% reduction. During the same period the harvested volume in Norway increased, while it declined in Shetland and BC.  

The equity ratio at the end of the second quarter stood at 40.1% (40.8%), while interest-bearing debt amounted to NOK 1 360m (1 313m). The cash flow from operations totalled NOK 156.8m in the second quarter alone, while the figure for the first six months of the year was NOK 264.7m.

During the last few years, Grieg Seafood has made significant investments in smolt production facilities, based on recirculation technology. The effect of improved smolt quality and larger average size of smolt in Norway has started to show positive results in terms of improved biological development and production.

The Group's EBIT before fair value adjustments of biomass was 9.29 NOK/kg (0.83 NOK/kg). Rogaland achieved an EBIT of 10.21 NOK/kg (5.15 NOK/kg), while Finnmark had an EBIT of 13.11 NOK/kg (3.02 NOK/kg). The EBIT in Shetland reached minus 5.71 NOK/kg (minus 8.89 NOK/kg), while in Canada the EBIT reached 6.03 NOK/kg in 2013 compared to 1.10 NOK/kg in 2012. The Norwegian sales company, Ocean Quality, reached an EBIT of NOK 4.0m (0.5%) compared to NOK 24.8m (3.8%) in the same period in 2012.

The result from Norway was very strong in the quarter, totalling NOK 11.85 per kg. In particular the result in Finnmark and for salmon was strong with NOK 14.90 per kg. Finnmark also shows a reduction in the total cost level per kg in this quarter. The cost development in the other regions is negative. For Rogaland, low seawater temperatures, increased mortality and harvesting from two sites which in 2012 were diagnosed with PD have caused higher cost of fish harvested.

The cost of fish harvested in Shetland and Canada was higher due to negative biological events in previous periods and low volumes. The result in Shetland is still very weak. Regional director Michael Stark in Grieg Seafood Hjaltland (UK) has resigned as regional director from ultimo August 2013. Sigurd Pettersen has been engaged as new regional director in a transitional period and will lead the continued biological turnaround in Shetland. The biological status in Shetland has improved compared to the same period in 2012.

Outlook
The supply of Atlantic salmon in the first half of 2013 was relatively stable, with a growth of 2% globally. The market outlook for 2013 and 2014 remains good. A seasonal supply-side increase is expected in the second half of 2013.

Grieg Seafood BC's harvested volumes in 2013 and 2014 will be low due to the operational problems in the smolt facility in the fourth quarter of 2012. This will result in a temporary higher cost level in BC. Comprehensive measures have been implemented at the smolt plant as planned, and this is expected to provide greater biological safety of production in BC in the period ahead. The harvested volume in BC is expected to revert to 15 000 tons in 2015.

Over time the results from Grieg Seafood Hjaltland have been too weak, due to an overall weak biological performance. The biological situation in Shetland this year has improved on the same period last year, in relation to both AGD and salmon lice, thanks to the initiatives that have been implemented. There is, however, great scope and a great need for operational improvements at Grieg Seafood Hjaltland through measures to improve the biological performance and seawater production. The on-going turnaround in Shetland will be further intensified in the period ahead.

Grieg Seafood and Bremnes Seashore have agreed to further development of Ocean Quality by including sales of Grieg Seafood's production outside Norway. Our sales activities in Shetland will be transferred as a subsidiary of Ocean Quality during the second half of 2013.  This will strengthen the sales and market work on one side and increase the focus on production on the other, while at the same time improve ability to realise synergies in both the sales area and the production area through the establishment of a functional organisation across regions and countries.

Grieg Seafood's main focus and priority is growth in Norway and increased utilization of existing licenses. Grieg Seafood is also well positioned to acquire new, green licenses as has been announced in Norway through our strong presence in Finnmark. The main focus of Grieg Seafood will continue to be on improved biological production and operations, and improving the Grieg Seafood group's relative cost position.  

Grieg Seafood expects the harvested volume in the current year to be 64 000 tons, compared with 70 000 tons in 2012, while the harvested volume in the third quarter of the year is expected to be 14 900 ton (-3%). The expected harvested volume in 2013 has been reduced by 2 000 tons compared with the previous guiding. The main reason for this is lower production in Rogaland in the first half of the year. The weaker production has also made it possible to optimise production in Rogaland by transferring some of the harvesting from 2013 to the start of 2014. Optimisation of harvesting depending on available capacity and market prospects may lead to a shifting of volumes between quarters and years.  

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.com. 

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