LEROY: FIRST QUARTER 2010 RESULTS
In the first quarter of 2010, Leroy Seafood Group had a turnover of NOK 1,873 million, representing an increase from NOK 1,522 million for the same period in 2009. The Board of Directors is very satisfied with the Group's development and with the result achieved for the period, which is one of the highest results achieved in the history of the Group to date, reports www.megafishnet.com with reference to Leroy Seafood.
The Group's operating profit
before fair value adjustment of biomass was NOK 255.1 million in the first quarter of 2010, compared with NOK 141.9 million in the first quarter of the previous year. The strong increase in operating profit compared with the same period last year is as high as 79.8%. This is explained by higher prices for the Group's main products, Atlantic salmon and salmon trout, and an extremely good development for the Sales and Distribution business segment. As a result of the Group's long-term industrial market strategy, the prices achieved for salmon and
salmon trout will naturally deviate from the spot market prices. Realised contract prices have been lower than prevailing spot prices in the quarter under review. At the beginning of 2010, the Group's share of contracts was higher than at the same point in 2009, and will vary between 35% and 40% throughout the year. Taken into consideration with the Group's positive market outlook, this indicates that the Group can expect to achieve good prices in the time ahead too. Net earnings are also, as expected, characterised by seasonally modest volumes. In addition, the fish farming company Lerøy Vest AS still has high
production costs compared with the other farming entities in the Group. On the back of increased volumes and improved production, the Board of Directors anticipates falling production costs in 2010 compared with 2009.
Thanks to good market conditions, improved biology and high volumes, the affiliated company Norskott Havbruk (the Scotland-based Scottish Sea Farms Ltd) saw an extremely good development in net earnings in the first quarter. Income from affiliated companies before fair value adjustment of biomass therefore increased from NOK 11.5 million in the first quarter of 2009 to NOK 26.2 million in the first quarter of 2010.
The Group's profit before tax and fair value adjustment of biomass in the first quarter of 2010 was NOK 266.9 million against NOK 124.1 million in the first quarter of 2009.
Some interesting key figures:
* 22.5 thousand tons gutted weight of salmon and salmon trout harvested (Q1 2009: 22.2)
* Turnover NOK 1,873 million (Q1 2009: 1,522)
* Operating profit before fair value adjustment of biomass NOK 255.1 million (Q1 2009: 141.9)
* Profit before tax and before fair value adjustment of biomass NOK 266.9
million (Q1 2009: 124.1)
* Spot prices for whole superior salmon have seen an increase of 20.5%
compared with Q1 2009
* Net interest-bearing debt was NOK 1,132 million (NOK 2,040 million at
* Equity ratio 54.0%
FINANCIAL SUMMARY 1(ST) QUARTER 2010
Net earnings for the first quarter of this year corresponded to a profit before fair value adjustment of biomass of NOK 3.71 per share, against a corresponding figure of NOK 1.72 in the first quarter of 2009. The Group's financial position is solid, with book equity of NOK 4,707 million, corresponding to an equity ratio of 54.0%. The Group's net interest-bearing debt at the end of the first quarter of 2010 was NOK 1,132 million against NOK 2,040 million at the end of the first quarter of 2009. The reduction in the Group's net interest-bearing debt over the past year of close to NOK 1 billion is extremely satisfactory.
Cash performance must also be viewed in the context of a dividend distribution of NOK 2.80 per share (corresponding to NOK 150 million) and an increase in biomass in the same period.
The Board of Directors has proposed to the Annual General Meeting on 26 May 2010 that the dividend is set at NOK 7.0 per share. If the Annual General Meeting declares the proposed dividend, the payment date will be 2 June 2010.
The shares will be quoted ex-dividend on 27 May 2010.
THE MARKET SITUATION/OUTLOOK
Expectations in terms of future developments in the world economy, including development in demand for the Group's products, have become more positive through 2009 and the first quarter of 2010, despite the turmoil in Greece, and are now characterised considerably less by fear than was the case at the beginning of 2009. That said, the Board of Directors believes there is still rather more uncertainty than normal at the macro scale. Development in demand for the Group's main products, Atlantic salmon and salmon trout, has been
extremely positive so far in 2010. Moreover, a substantial drop in the global supply of Atlantic salmon for 2010 is expected, as well as limited growth in the next few years. Correspondingly, the Board of Directors anticipates a continued good development in the global demand for Atlantic salmon. This, together with expectations for improved productivity in the Group's production, including improved biology, provides justification for the Board's positive attitude to the Group's development. The Board of Directors currently anticipates a better result for the Group in the second quarter of 2010 than was achieved in the
second quarter of 2009, and correspondingly for the year as a whole.
Questions and comments may be addressed to the company's Chairman, Helge Singelstad, the CEO, Henning Beltestad, or to the CFO, Ivan Vindheim.