Grieg bounces back with profit of NOK 265m in Q4

Grieg Seafood has reported an operating profit of NOK 265m (£22m) for the final quarter of last year, boosted by rising prices and declining costs.

The result is a huge improvement on the corresponding three months in 2020, when it reported an operating loss of NOK 16m (£1.3m).

The final quarter of 2021 was also the period when Grieg completed the sale of its Shetland business to Scottish Sea Farms for £164m.

Not including Shetland, Grieg reported a harvest of 75,600 tonnes for the whole of 2021 and 23,700 tonnes in Q4.

CEO Andreas Kvame said: “In the fourth quarter, operations continued the positive improvement momentum seen coming out of the third quarter, with improving survival rates and a declining cost level.

“Development throughout the year has been largely as expected, with costs in Norway gradually declining towards NOK 40 per kg (£xx).

He continued: “In BC (British Columbia, Canada), costs have been too high, but successful mitigating efforts have reduced impact from harmful algae blooms compared to earlier years, and we expect positive results from these initiatives going forward.

“After year-end, we signed an agreement for refinancing of our debt, which combined with the completion of the Shetland transaction, secures the long-term financing of ongoing operations and the flexibility to execute on our strategic priorities, while maintaining a robust capital structure. We are excited for 2022 and the years to come.”

Grieg said In Newfoundland, where it suffered an ISA (infectious salmon anaemia) scare last year, the smolt was healthy and growing well.

The focus during the quarter was preparing for seawater operations. This was going according to plan, and the first smolt release remains on schedule for spring and summer this year.

Reporting a strong operational performance throughout the period, helped by rising salmon prices, Grieg said the Q4 highlights included:

• EBIT before production fee and fair value adjustment of NOK 265m driven by high market prices and declining operational cost;
• strong operational performance, with increased survival in all regions and good cost development;
• completion of Shetland transaction and debt refinancing by NOK 3.2 bn sustainability-linked credit facility strengthens financial position to execute strategic priorities and deliver shareholder return;
• commencement of value added processing in Norway;
• ranked second by the Coller FAIRR Protein Producer Index of the world’s most-sustainable protein producers;
• award of a Leadership (A) score by the CDP (Carbon Disclosure Project) for transparency and actions related to climate change; and
• expected harvest of 15,500 tonnes in Q1 2022 and 90,000 tonnes for the full year 2022.

Grieg is expected to resume dividend payments during the first half of this year.