Grieg Seafood issues profit warning and delays Newfoundland investment

Grieg Seafood is forecasting an operating loss of NOK 187 million for the third quarter of 2020 and has postponed parts of its planned investment in Newfoundland due to ‘market uncertainty’. The profit warning – which the company stresses is based on estimated figures – comes ahead of Grieg’s full report for Q3, now expected to be released on 17 November.
NOK 150 million of the operating loss is directly related to discontinued operations on the Isle of Skye, Grieg says. Also contributing are lower spot prices and higher costs in British Columbia.
Grieg expects the total harvest of 21,200 tonnes GWT (Q3 2019 saw a harvest of 21,000 tonnes). A drop in demand from the hospitality trade led to reduced prices for the quarter’s harvest, and prices were also down for the Shetland harvest which was carried out early, resulting in reduced weight. The company says it also faced increased costs from handling ‘biological challenges’ in Shetland and British Columbia.
In Q4, Grieg expects to harvest 26,500 tonnes, bringing the total for 2020 to around 90,000.
In September, Grieg announced it was discontinuing operations on Skye due to the long distance between the island and the company’s main base on Shetland.
The company’s investment in Placentia Bay, Newfoundland has been ‘slowed’ rather than stalled, and the total investment for the RAS smolt facility, excluding completion of the post-smolt A unit, is expected to be around CAD 60 million for the years 2020-2021. The project for post-smolt A will at a later stage be evaluated for construction. The total cost of the project is expected to be CAD 30 million, with the first harvest planned.
Grieg is listed on the Oslo Stock Exchange and employs 900 people worldwide.