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Grieg Seafood ASA: Third quarter 2018 results |
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Highlights
Results Q3 2018 The Grieg Seafood Group harvested 16 941 tonnes of salmon in Q3 2018, compared with 16 875 tonnes in Q3 2017. The average spot price (Nasdaq Salmon Index) for the period was NOK 54.07 per kg, down NOK 1.74 per kg from the same period in 2017. The average realized price for Grieg Seafood was down by NOK 1.38 per kg comparing these quarters. Grieg Seafood's total operating income in Q3 2018 amounted to NOK 1 589 million, a reduction of 14% compared to the same period last year. The farming cost increased by NOK 1.11 per kg compared to the same quarter last year. This is mainly related to reduced survival towards the end of the quarter due to algae incidents in BC and gill-related diseases on Shetland. The Group's EBIT before fair value adjustment of biological assets was NOK 160 million during the quarter, compared to NOK 229 million in the same quarter of 2017. EBIT per kg amounted to NOK 9.43 for the period, down from NOK 13.59 in Q3 2017. Strategic priorities Grieg Seafood's objective is to ensure long term sustainable growth by combining great people, nature and technology. By 2020, Grieg Seafood aim to increase production to reach an annual harvest volume of 100 000 tonnes and a production cost at or below weighted industry average, targeting NOK 37.90/kg. Continued access to high-quality smolt is critical to ensure future growth and reduce costs. Increased production of larger smolt will also shorten production time in sea, thus reducing exposure to biological risks and contributing to increased survival. Another essential aspect of Grieg Seafood's growth strategy is increased utilization of the Group's licenses. High site flexibility is essential to improve utilization, and Grieg Seafood cooperates with local authorities on an ongoing basis to optimize flexibility. During the quarter, the Group was granted two new locations in Finnmark. The Group also continually undertakes cost-reducing initiatives, and to ensure progress towards its goals, has initiated the GSF 2020 improvement program, with specific targets and initiatives for each region. Market developments Salmon prices were volatile in the third quarter of 2018. The average price level was down by NOK 14.0 compared to Q2 2018 and down by NOK 1.74 compared by Q3 2017. The salmon supply in the quarter has been higher compared to Q3 2017, which in relation to the high average prices confirms the strong underlying demand for farmed salmon. Outlook The current situation, with limited supply growth and strong underlying demand, is expected to continue. In addition, a rise in demand due to the Christmas season will most likely contribute to strong market prices for the last quarter of 2018. Grieg Seafood expects to harvest approximately 24 100 tonnes in Q4 2018, totaling 75 000 tonnes for the full year 2018, corresponding to an increase of 20% from 2017. Expected harvest volume for 2019 is 82 000 tonnes. Please find enclosed the Group's Q3 2018 report and presentation. For further information, please contact:
About Grieg Seafood Grieg Seafood ASA is one of the world's leading salmon farmers, specializing in Atlantic salmon. The Group has an annual production target of 100 000 tonnes gutted weight in 2020. Our farming facilities are in Finnmark and Rogaland in Norway, British Columbia in Canada and Shetland in the UK. Approximately 780 people are employed by the Group. Grieg Seafood ASA was listed at the Oslo Stock Exchange in June 2007. Our headquarters are situated in Bergen, Norway. The business development of Grieg Seafood ASA focuses on profitable growth, sustainable use of resources and being the preferred supplier to selected customers. To learn more, visit www.griegseafood.com This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act |
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GSF Q3 2018 Report GSF Q3 2018 Presentation |
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