Grieg Seafood (GSF) Q2 2024 earnings summary

Executive summary

• Operational EBIT for Q2 2024 was NOK -35 million, or NOK -2.3 per kg, compared to NOK 547 million in Q2 2023, reflecting a challenging quarter, especially in BC and Finnmark.

• BC segment was significantly impacted by a biological event, with continued negative effects expected in Q3; Finnmark also faced biological challenges but saw improvement by quarter-end.

• Harvest volume dropped 33% year-over-year to 15,272 tonnes, with operational EBIT at NOK -35 million versus NOK 547 million in Q2 2023.

• Construction of post-smolt facilities in Rogaland, Finnmark, and Newfoundland, and a VAP facility at Gardermoen, are progressing as planned.

• Search for long-term partners for Canadian operations is ongoing, with a conclusion expected in autumn 2024; strategic investments in BC suspended pending government decisions.

Financial highlights

• Q2 2024 sales revenues were NOK 1,520 million, down from NOK 2,372 million in Q2 2023; harvest volume was 15,272 tonnes (22,645 tonnes in Q2 2023).

• Net profit for Q2 2024 was NOK -701 million, compared to NOK -563 million in Q2 2023; EPS was -6.2 NOK/share (Q2 2023: -5.0 NOK/share).

• Operational EBIT margin declined sharply, with group EBIT/kg at -2.3 NOK (Q2 2023: 24.2 NOK/kg); operational EBITDA at NOK 128 million, down from NOK 686 million.

• Net interest-bearing debt (excl. IFRS 16) at 30 June 2024 was NOK 4,298 million; NIBD/harvest volume at NOK 54.8–61.1/kg.

• Free liquidity at quarter-end was NOK 1,606 million, including NOK 366 million in cash and NOK 1,240 million in undrawn credit facilities.

Outlook and guidance

• BC is expected to post a negative operational EBIT in Q3 2024 in the range of NOK 230–250 million due to ongoing biological challenges.

• Full-year 2024 harvest volume guidance is unchanged at 78,500 tonnes, with regional targets: Rogaland 28,000t, Finnmark 27,000t, BC 12,500t, Newfoundland 11,000t.

• Estimated contract share of Norwegian harvest volume is 9% for Q3 and 8% for the full year; VAP share to increase to 7–8% in 2024, with a 25% ambition by 2026.

• Cost-reduction program targets NOK 150 million in savings over two years; maintenance capex for 2024 estimated at NOK 300 million, growth investments at NOK 1,100 million.

• Robust salmon market expected to continue due to healthy demand and stable supply.