Highlights - Fourth Quarter 2014

• EBIT before fair value adjustment of biomass was MNOK 140 in Q4 (MNOK 87 in 2013).
• This includes a MNOK 60 gain from sale of GSF's shares in SalmoBreed AS in Q4. 
• Production was as expected throughout the period, with the exception of Shetland where gill disease led to increased loss. 
• Compared to 2013 the production in BC was especially good.  The development is now according to the plan for a normalised level in the course of 2015.
• Salmon prices increased during the period, but trade sanctions against Russia had negative impact on the prices, especially around Christmas. 
• Andreas Kvame was appointed CEO and will start not later than 1 June 2015.
• Final allocation of 4 green licences to Finnmark. This provides a basis for a good growth in the region.

Main features of 2014

• EBIT before fair value adjustments of biomass MNOK 341 in 2014 (MNOK 348 in 2013). 
• The Board will decide on the proposed dividend for the year in connection with its consideration of the annual accounts for 2014.
• Prices were strong throughout the year, but trade sanctions against Russia have resulted in a lower price at the end of the year than expected. 
• Pacific salmon activities are being terminated and the focus is now on the production of Atlantic salmon. 
• 64 736 tons were harvested in 2014, reflecting an increase of 6 675 tons on 2013. The same level of growth is planned in the coming years. The company is systematically working to reduce the level of costs through improved operations and increased capacity utilisation.  
• The equity ratio in the company is increased to 44%. The key figures cover all requirements in the loan agreement with a satisfactory margin.

EBIT for the Group in Q4 before fair value adjustment of biomass was MNOK 140, against MNOK 87 in 2013. The harvested volume in Q4 was 15 941 tons, against 15 995 in Q4 2013, reflecting a decrease of 0.3%.

Salmon prices increased throughout Q4, but the absence of the Russian market meant that price growth in the Christmas period was less than could normally have been expected.

The level of business based on fixed price contracts was low in Norway, and slightly higher in the UK.

Costs were slightly higher in Q4 as a result of lice treatment and mortality due to gill disease in Shetland, as well as fish that had been affected by PD (Pancreas Disease) in Rogaland.

Sea production was stable throughout the period, with underlying production in BC better than expected. 

GSF's shareholding in SalmoBreed AS was sold and the resulting pre-tax gain of MNOK 60 is included in EBIT for the Group.

The accounts show a profit of MNOK 139.9 before tax and fair value adjustment of biomass, against MNOK 69.9 in Q4 2013.

GSF has investments in both GBP and CAD, which has given a foreign exchange profit in Q4 since the Norwegian krone has been weakened.

Group sales revenues in Q4 totalled MNOK 696.6, reflecting an increase of 1.1% on the corresponding period in 2013. Volumes were 0.3% down, while prices were 1.4% up in the same period in 2013.

Outlook

Limited supply-side growth is expected to result in a strong market in the period ahead, and the continuing weakness of the Norwegian krone is also likely to contribute to high prices.

GSF expects to harvest 72 000 tons in 2015, taking account of a normalised harvested volume of around 13 000 tons, which is expected to be re-established in BC.  In Finnmark and Shetland, some decline in the harvested volume is likely in 2015 as a consequence of adjustment to the zoning and location structure in these regions, which also will result in increased cost in 2015, and an expected increase in these volumes again in 2016. The harvested volume in Q1 2015 is expected to be 13 900 tons.

The final allocation of green licences in Finnmark was made in Q4 2014. In this connection GSF was awarded 4 licences, providing a basis for considerable growth in this region.

Ocean Quality is developing its business to include the sale of GSF's fish in BC with effect from and including Q1 2015. All fish produced by GSF will therefore be sold through Ocean Quality.

Andreas Kvame has been appointed CEO of the company and will take up his position not later than 1 June 2015. He has long experience from major operational units in the fish farming business, and in this connection we envisage a strengthened focus on improvement of the company's internal operating procedures. The company's main goals are better licence utilisation and lower costs through continuous improvement of biological performance.

The Board will revert with a proposition of a potential dividend in connection with consideration of the annual accounts for 2014.

Please find enclosed the company's Q4 2014 report and presentation.