Q1 2010: Best quarterly results ever for GSF
Highlights - first quarter 2010
· Best quarterly results ever for Grieg Seafood ASA.
· Greatly improved performance in Norway and Shetland.
· Strong prices and a tight market on the supply side.
· Temporarily weak performance in Canada due to reorganisation of one production area. · Proposed dividend of NOK 0.25 for 2009.
Results first quarter 2010
The Grieg Seafood Group's EBIT before fair value adjustments was NOK 115.4m in the first quarter 2010, compared with NOK 11.1m in 2009, reports www.megafishnet.com with reference to Grieg Seafood.
It was again Norway and Shetland which showed strong increase in profits, due to higher prices and lower production costs. Results in Canada, as reported previously, were weak as a result of the reorganisation of a production area with harvest of small-sized fish. The Group's EBIT was NOK 6.38 per kg (NOK 1.21 per kg). Rogaland achieved an EBIT of NOK 9.07 per kg (NOK -0.41 per kg), while Finnmark reached an EBIT of NOK 8.97 per kg (NOK 1.36 per kg). The EBIT in Shetland also showed a strong increase and reached NOK 7.43 per kg (NOK -2.28 per kg), while the result in Canada was reduced to NOK 0.18 per kg (NOK 9.14 per kg).
The salmon market in the first quarter was affected by a further decline in the supply from Chile. The supply side shortage has led to an unusually tight salmon market and high prices globally. Salmon prices were at seasonally record high levels throughout the quarter.
The harvested volume in the first quarter totalled 18 080 tons, an increase of 96.4% from the same period last year. Sales revenues increased with 118% to NOK 618.9m in first quarter 2010. The pre-tax profit in the first quarter was NOK 357.3m, compared with NOK 171.0m in the corresponding period last year. The equity ratio at the end of the first quarter was 42.7% Both higher salmon prices and lower production costs contributed to the considerably improved profits. Fixed price contracts have reduced the positive effect of the high salmon prices. Fixed price contracts accounted for 25% of the total sales volume in Norway. Cash flow from operations was NOK 246.6m in first quarter 2010, compared to NOK 12.6m in the same quarter in 2009.
The salmon market is expected to remain tight for the next couple of years due to restrictions on the supply side. Offers from Chile are not expected to pick up again until the second half of 2011, at the earliest. Currently, there is also only limited available production capacity under existing licences and production regimes in other fish farming regions globally. Despite difficult economic times globally and increased salmon prices, the demand has so far proved to be robust. Grieg Seafood can report a positive trend in production costs in most production areas, and the improvement in operations is expected to be maintained. An improved fish health situation and lower mortality will also contribute to lower production costs. In BC in particular we expect to see normalised margins and lower production costs from the second quarter. Grieg Seafood's estimated harvest volume in 2010 remains at 68,000 tons, in accordance with current production plans, an increase of close to 40% compared to 2009. This is in spite of slightly lower sea water production in the first quarter. The main growth period lies ahead of us and this will be decisive for the actual harvest volumes in the period ahead.
On 26 April 2010, the board of directors in Grieg Seafood proposed to pay a dividend of NOK 0.25 per share for the year 2009. The Annual General Meeting will be held on 27 May 2010. The Grieg Seafood share will be quoted ex-dividend on 28 May 2010.
For further information, please contact:
CEO Morten Vike (Cell phone: +47 994 911 65) CFO Atle Harald Sandtorv (Cell phone: +47 908 45 252)