r eg b ll s des te rofits fall

THE Grieg Seafood Group saw its 2017 fourth quarter operating income decline by 16 per cent to NOK 1,731 million, largely due to lower market prices and reduced harvest volumes.

And the operating profit showed an even sharper fall. But the company does expect an upsurge in demand this year.

Grieg harvested 18,667 tonnes of salmon in Q4 2017, compared with 20,917 tonnes in Q4 2016, corresponding to an 11 per cent decline.

During the period, the group’s total operating costs increased by NOK 0.50 per kg, and the group’s EBIT before fair value adjustment of biomass was NOK 151 million, compared with NOK 456 million in Q4 2016. EBIT per kg amounted to NOK 8.1 for the quarter, compared with NOK 21.8 in Q4 2016.

The company pointed out that the average spot price (Nasdaq Salmon Index) for the period was NOK 49.42 per kg, down NOK 17.70 from the same period in 2016.

Outlining its strategic priorities, the company said its overall goal is to increase production by a minimum 10 per cent per year up until 2020.

Furthermore, the company’s ambition is for production costs to be on a level with or lower than the industry average. One of the most important initiatives to boost production is to increase smolt capacity and to release larger smolt.As part of this initiative, Grieg Seafood said it has entered into cooperation agreements with Norway Royal Salmon (NRS) and Bremnes Seashore, to increase the companies’ smolt capacity in Finnmark and Rogaland.

‘GSF’s own hatcheries in Norway will be expanded by several separate lines. Together, this will disperse the biological risk related to smolt production between several onshore facilities.

‘Secure access to smolt is critical to ensure future growth. Releasing larger smolt means shorter sea production time, thus contributing to reduced biological risk and increased survival.’