Covid impacts Leroy Q2 profits

The Lerøy Seafood Group, co-owners of Scottish Sea Farms, today reported a significant drop in profits due almost entirely to the Covid-19 pandemic during the second quarter of this year. Q2 Revenues fell from NOK 5,340 million to NOK 4,712 million (£403 million), while the operating profit before fair value adjustment related to biological assets more than halved at NOK 322 million (£27.5 million), compared with NOK 774 million (66-million)in Q2 2019.

Lerøy stands out from other salmon farming businesses in that it also owns one of Norway’s largest white fish trawler fleets, fishing for cod, haddock and saithe, along with a major seafood processing business.

The group reports revenues of NOK 10,017 million (£855 million) for the first six months of 2020, compared with NOK 10,086 million in the first half of 2019. Operating profit before fair value adjustment related to biological assets for the first half of 2020 was NOK 1,138 million (£97 million) compared with NOK 1,465 million (£125m) for the first half of 2019. Profit before tax and fair value adjustment related to biological assets for the first half of 2020 was NOK 1,037 million compared with NOK 1,524 million for the first half of 2019.

CEO Henning Beltestad said:

\’Earnings in Q2 2020 are substantially lower than expected at the start of the year. The key factor behind this is the fall in salmon prices caused by the impact on demand of the Covid -19 pandemic. We have no way of knowing how long we will be affected by the pandemic, but we are experiencing that the Group’s model of close integration with our customers has grown even stronger throughout these challenges. We are confident that the long-term demand for healthy and sustainable high-quality seafood has not changed and will remain high.

\’Our main focus has been to keep the value chain open and ensure deliveries to our customers. We have succeeded in this. I am proud of and grateful for the hard work and determination my colleagues have shown.\’

The Farming segment reported an operating profit before fair value adjustment related to biological assets of NOK 216 million in Q2 2020, compared with NOK 595 million in Q2 2019. During the quarter, the farming segment harvested 39,000 tonnes, compared with 37,000 tonnes in Q2 2019.