Grieg second-quarter harvest up 22% year on year
Grieg Seafood harvested 22,568 tonnes of salmon in the second quarter of 2018, a 22% increase compared to the 18,503 tonnes harvested in Q2 2017.
The extra volumes meant total operating income for Q2 2018 amounted to NOK 2.32 billion, an increase of 14% on Q2 2017, although the average realised price for Grieg was down by NOK 3.21 per kg comparing these quarters.
This was partly due to a combination of a high proportion of harvesting towards the end of the quarter when prices were lower, and partly due to lower price achievement for pancreas disesease-affected fish from the Rogaland region of Norway.
BC up 115%
Grieg reported higher harvest volumes in British Columbia – up 115% on the same period in 2017 to 7,290 tonnes – and the Finnmark region of Norway, up 55% to 6,400 tonnes.
Harvest volumes in Shetland totalled 2,482 tonnes, a fall of 23% compared to the Q2 2017 total of 3,231 tonnes.
In its Q2 2018 report, Grieg said quality and average weight of fish harvested in Shetland were good and contributed to high price achievement.
Shetland cost high
The report stated: “Cost in Shetland remains high, mainly attributable to algae prevention and sea lice treatments. Low harvest volume also affects cost per kg.
“Harvest volume is expected to increase in the third quarter and the cost per kg is trending in a positive direction. Regardless, the cost level in Shetland will remain at a high level.
“Sea production was stable throughout the period. Fresh water treatments have provided good results and the sea lice situation is under control.
“The estimated harvest volume for the full year remains unchanged at 12,000 tonnes. EBIT before fair value adjustment of biological assets was NOK 16.72 per kg for the quarter, up from NOK 8.32 per kg in Q2 2017.”
Harmful algal bloom
The good results in BC come despite a harmful algal bloom that caused the death of 250,000 fish, equivalent to 1,000 tonnes.
The report stated: “Grieg Seafood has insurance to cover such incidents and net estimated cost ended at NOK 19 million, all accounted for in Q2.
“The fish affected were scheduled to be harvested in the second half of 2018. However, with a long-term focus on biology in general and algae in particular, over time Grieg Seafood BC has managed to stabilise biology and reduce costs.
“Grieg Seafood continuously works to improve biosecurity and all sites perform daily algal monitoring. The harmful algal bloom that occurred in Q2 had an extraordinarily high concentration and was spread throughout the entire water column. Thus, treatments or other protective measures could not prevent or mitigate the effects of the incident. Volume will be lower the next quarter, affecting costs.”
Adjusted guidance
Grieg has adjusted BC harvest volume guidance for 2018 down by 1,000 tonnes to 17,500 tonnes. EBIT before fair value adjustment of biological assets was NOK 23.85 per kg for Q2 2018, compared to NOK 14.87 per kg for the corresponding period in 2017.
Company-wide, Grieg Seafood expects to harvest approximately 17,100 tonnes in Q3 2018 and 75,000 tonnes for the full year 2018, corresponding to an increase of 20% from 2017. The full year estimate has been reduced by 5,000 tonnes due to PD in Rogaland and algal bloom in BC.
