Better days ahead for Scottish Sea Farms – Lerøy

THE Lerøy Seafood Group today predicted an improved outlook for its Scottish Sea Farms (SSF) operation which it shares with fellow Norwegian salmon farmer SalMar.

Delivering its financial results for the final quarter of 2019, the company said costs are expected to decline in the current quarter when SSF’s new RAS facility at Barcaldine will be delivering larger and more robust smolts.

The harvest guidance for this year is slightly up at 26,000 tonnes, but the company said there potential for ‘significant growth’ in 2021.

Scottish Sea Farms harvest volumes in Q4 2019 were down by over 1,000 tonnes at 5,317 tonnes and the operational EBIT fell from NOK 158 million in Q4 2018 to NOK 49 million this time.

For the whole group, Lerøy announced slightly lower Q4 revenues at NOK 5,239 million and a farming segment harvest of 43,000 tonnes, against 49,000 tonnes in Q4 2018.

The final quarter operating profit was down from NOK 948 million to NOK 769 million. But group revenues for the entire year, which include a significant contribution from its white fish trawling operation, totalled NOK 20,427 million, up from NOK 19,838 million in 2018.

Lerøy CEO Henning Beltestad said: ‘The fourth quarter saw extremely volatile prices for Atlantic salmon, but the underlying development during the quarter and the profit figures have in the main been as expected.

‘Looking back on 2019 as a whole, we experienced several unforeseen incidents in the farming segment that had a negative impact on the harvest volume and, as a result, our cost levels.

‘The onshore industry for white fish has experienced challenges, while we can report a good development in downstream operations.

‘At the start of 2020, we are confident that Lerøy has a sound position for profitable growth in the years to come.’

He added: ‘2019 was a good year for catches. However, high prices for raw materials represent challenges for the onshore industry in Norway.

‘In recent years, the group has implemented and completed a high number of measures relating to production and marketing, in a move to improve earnings for the onshore industry. The group expects to start to see the positive results of these measures in 2020.’

Looking ahead, estimated harvest volume for 2020, including the share from associates, is currently 183,000-188,000 tonnes of salmon and trout.

Lerøy\’s target is for the corresponding figures in 2021 to be between 200,000 and 210,000 tonnes.