Highlights - Q4 2017

• Profit decline as a result of lower market prices and reduced harvested volumes
• 3 000 tonnes of harvest volume transferred from 2017 to 2018
• Results impaired by PD-affected fish in Rogaland
• Upsurge in market activity and good demand expected in 2018
• Harvested volume expected at 80 000 tonnes in 2018, up 28 % from 2017
  • Number of fish in sea increased by 27 % YoY
  • Biomass in sea increased by 20 % YoY

Financial results Q4 2017
The Grieg Seafood Group harvested 18 667 tonnes of salmon in Q4 2017, compared with 20 917 tonnes in Q4 2016, corresponding to an 11 % decline. The harvested volume is lower than expected, mainly as a consequence of the transfer of 3 000 tonnes to 2018.

The average spot price (Nasdaq Salmon Index) for the period was NOK 49.42 per kg, down NOK 17.70 from the same period in 2016. As the contract prices were higher than the spot prices over the period, the realised price reduction amounted to NOK 12.40 per kg, compared to the same period of the previous year.

Grieg Seafood's total operating income in Q4 2017 amounted to NOK 1 731 million, down 16% from the corresponding period in 2016.

During the period, the Group's total operating costs increased by NOK 0.50 per kg, and the Group's EBIT (operating profit) before fair value adjustment of biomass was NOK 151 million, compared with NOK 456 million in the same quarter of 2016.

EBIT per kg amounted to NOK 8.1 for the quarter, compared with NOK 21.8 in Q4 2016.

Strategic priorities
Grieg Seafood's overall goal is to increase production by minimum 10% per year up until 2020. Furthermore, the company's ambition is for production costs to be on level with or lower than the industry average.
One of the most important initiatives to boost production is to increase smolt capacity and to release larger smolt. As part of this initiative, Grieg Seafood has entered into cooperation agreements with Norway Royal Salmon (NRS) and Bremnes Seashore, to increase the companies' smolt capacity in Finnmark and Rogaland, respectively. In addition, GSF's own hatcheries in Norway will be expanded by several separate lines. Together, this will disperse the biological risk related to smolt production between several onshore facilities.

Secure access to smolt is critical to ensure future growth. Releasing larger smolt means shorter sea production time, thus contributing to reduced biological risk and increased survival.

Another pivotal point in the growth strategy, is increased utilisation of the company's licences.  High site flexibility is essential to improve utilisation, and Grieg Seafood cooperates with local authorities on an ongoing basis to optimise flexibility.

Increased volumes, improved utilisation of capacity and shorter production time at sea will contribute to higher efficiency and reduced cost of production. The company also continually undertakes various cost reduction initiatives to help achieve its cost targets.

Along with growth, these initiatives are designed to ensure that the cost per kg is reduced to industry average levels, or lower. To reach this goal, Grieg Seafood has started an internal improvement programme, which will operate until 2020.

Market developments
Salmon prices declined somewhat in Q4 2017. The drop should be seen in connection with an increase in the supply of salmon to the market.

Lower market prices are expected to stimulate the market activity, which in turn will lead to increased demand over the year. This may have a positive effect on the salmon prices through 2018.

The Group's total share of fixed price contracts in Norway in Q4 2017 was 21 %. For Q1 2018 the share of fixed price contracts is estimated to be 46 %. For 2018 as a whole, the share of fixed price contracts is estimated to be approx. 22 %.

Outlook
In the longer term, the relationship between supply and demand for salmon is expected to stabilise. This gives grounds to also expect good market prices in the future.

GSF expects to harvest approx. 8 900 tonnes during Q1 2018. For 2018 as a whole, a harvested volume of approx. 80 000 tonnes is expected, corresponding to an increase of 28 % over 2017.

Please find enclosed the company's Q4 2017 report and presentation.

For further information, please contact:
- CEO Andreas Kvame (cell phone: +47 907 71 441)
- CFO Atle Harald Sandtorv (cell phone: +47 908 45 252)

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