Lerøy reports fall in Q3 profits
The Lerøy Seafood Group today reported a £15m drop in its third quarter profits, blaming weak salmon and trout prices for the slump.
The Q3 operating profit was NOK 412m (£29m) against NOK 631m (£44.5m) a year ago.
On a brighter note, the company said its associate Scottish Sea Farms, in which Lerøy holds a 50% stake, was performing well. In total, associates and joint ventures are back in profit.
The group’s Q3 profit from associates and joint ventures was NOK 15m (Just over £1m) compared to a loss of NOK 67m (-£4.7m) last year.
The corresponding figures for the first nine months of the year show an improvement from NOK -137m (£9.6m) in 2023 to NOK 101m (£7m) this year
On a group level, the salmon and trout harvest volume dropped by 5% to 51,367 tonnes while the group’s wild catch volume was down by 8% to 13,266 tonnes, mainly due to lower catch quotas.
The combined fishing, fish farming and processing business said it has implemented a number of improvement measures in recent years and today also announced a continuing investment in submersible salmon cages.
Biological performance this year has shown a significant improvement compared with 2023, but the third quarter was challenging with slightly lower growth than expected.
The company said: “The prices realised for salmon and trout in the quarter have been weak, leading to a significantly weaker result than in Q3 2023. Downstream operations/VAPS&D [value added processing/sales & distribution] continue to develop positively, while earnings in the Wild Catch segment have been strongly impacted by the reduction in quotas and hence the operating basis.”
Lerøy added: “This development resulted in revenues for the quarter of NOK 7,889m (£557m), which is on par with the same period of last year.”
Scottish Sea Farms’ hatchery at Barcaldine
The fish farming segment comprises the group’s three farming regions in Norway – Lerøy Aurora located in Troms and Finnmark, Lerøy Midt located in Nordmøre and Trøndelag and Lerøy Sjøtroll located in Vestland.
The operating EBIT for the Farming segment was NOK 310m (£22m) in Q3, compared with NOK 566m (£40m) in Q3 2023. A total of 51,000 tonnes were harvested in the period, compared with 54,000 tonnes in the same period of 2023.
Lerøy said prices for salmon and trout fell significantly throughout Q2 2024, and this trend continued into Q3, driven by increasing and very high export volumes.
It added: “Export volumes at an all-time high may indicate that some of the increased export volume has been driven by forced harvesting following a somewhat challenging biological situation in the quarter.
“Statistics from the Norwegian Directorate of Fisheries show that in September the harvest volume for salmon was 14% higher, while average weights (for salmon) were 5% lower than in September 2023. The standing stock of salmon in Norway was 3.1% higher at the end of August and 0.4% lower in September this year compared with 2023.”
Lerøy’s share price fell by more than 7% in Oslo this morning following the announcement of its Q3 results.
