Cash-strapped Grieg reins in Canada investment to focus on Norway

Norway and Canada salmon farmer Grieg Seafood is throttling back investment in Newfoundland as part of a broader plan to boost its flagging finances and focus on its Norwegian operations.

Grieg made just NOK 8 million (£0.57m / CAD 1.02m) in operating profit on a harvest of 77,704 gutted weight tonnes of Atlantic salmon in 2024 and recorded a pre-tax loss of NOK -2.6 billion. That loss included a NOK -1.7bn reduction in the value of its Canadian assets, such as farm licences, due to political uncertainties and operating conditions. 

The uncertainties include US President Donald Trump's threatened tariffs on imports from Canada, and the announcement last year by Canada’s Liberal-led federal government that open-net pen salmon farming would be banned from mid-2029 in British Columbia as part of Prime Minister Justin Trudeau's plan to "transition" to closed containment or land-based fish farming in the province. Grieg paused strategic investments in BC after that decision, but spent NOK 12m on maintenance in the last quarter of 2024.

Prolonged uncertainty

"Justin Trudeau announced his resignation on 6 January, 2025," Grieg wrote in its Q4 2024 report published today. "Together with Trump's victory in the US election, the political uncertainty continues in this region. The election for a new leader for the Liberal Party will take place 9 March 2025 followed by a federal election later in the year. The transition process will be delayed as a result of this."

It added that due to prolonged uncertainty in BC, there had been an impairment of seawater licences and goodwill values.

Reduced capex in NL

There is no threat to salmon farms in Newfoundland, where Grieg has exclusive rights to farm salmon in Placentia Bay, but the cash-poor fish farmer has not yet found suitable investment partners to continue developing the operation.

“This has caused us to revisit our operations in Newfoundland, including a review of the timeline for investments. Meanwhile, we recognise that our operation in Newfoundland has not reached its full potential. Therefore, we have revisited our outlook and have conducted an impairment in regard to intangible and tangible assets,” Grieg wrote in .

Grieg intends to reduce planned capital expenditure in Canada by NOK 500-600m over the next five years.

“We will be focusing our efforts on sustainable and profitable growth in our Norwegian operations while protecting the value of our Canadian assets,” said Grieg chief executive Andreas Kvame.

£142m bond

Grieg is contemplating the issue of a NOK 1.5 – 2.0 billion (£107m - £142m) hybrid bond loan that will add to the company’s equity and strengthen financial flexibility.

The company is also in talks to sell and lease back its Adamselv smolt / post-smolt facilities in Finnmark, northern Norway, which will add approximately NOK 1bn to its balance sheet.

“The expected combined net effect of all these transactions is a reduction of our net interest-bearing debt by approximately NOK 1.5-2.2 billion and a strengthening of our liquidity position by approximately NOK 2.5 billion before financing costs and repayment of the (pre-existing) green bond in June 2025,” said Kvame.

“While this will provide growth capital, we need to continue our work to improve operational stability and ensure cost efficiency with rigorous financial discipline.

A strong asset base

“We are building on a strong asset base with fundamentally sound biology in Norway and enter 2025 with a higher biomass than ever before in both Rogaland and Finnmark. Rogaland is consistently delivering operational and financial performance in line with leading peers, and we have high ambitions as we now are deploying the same operating model in Finnmark. This should enable us to deliver stronger financial results more in line with our long-term strategic ambitions and aspirations.”

Grieg has targeted a harvest volume of 84,000 gwt in 2025, 6,000 gwt higher than last year. The expected harvest distribution is:

• Rogaland: 30,000 gwt
• Finnmark: 32,000 gwt
• British Columbia: 12,000 gwt
• Newfoundland: 10,000 gwt