Lerøy Seafood Group (LSG) Q1 2022 earnings summary

Executive summary

• Revenue rose 12% YoY to NOK 5,524m; EBIT before fair value adjustments increased 87% to NOK 852m, as higher seafood prices lifted farming and catching results.

• Downstream margins were pressured by extreme price volatility, inflation and delayed price pass-through.

• Salmon and trout harvest fell 24% YoY to 32,057 GWT; whitefish catch declined 2% to 25,116 tonnes.

Financial highlights

• Revenue was NOK 5,524m versus NOK 4,925m; EBITDA before fair value adjustments rose 54% to NOK 1,173m.

• EBIT before fair value adjustments was NOK 852m versus NOK 455m; reported EBIT was NOK 1,067m, including NOK 216m in biological-asset fair value gains.

• Profit before tax and fair value adjustments was NOK 838m versus NOK 455m; reported profit was NOK 887m versus NOK 664m.

• Adjusted EPS rose to NOK 1.02 from NOK 0.58, up 75% YoY.

Outlook and guidance

• 2022 harvest guidance was 185,000 GWT consolidated plus 23,000 GWT from associates, or 208,000 GWT total; farming guidance was unchanged.

• Farming guidance: Aurora 40,000 GWT, Midt 71,000 GWT and Sjøtroll 74,000 GWT; Norskott guidance was 46,000 GWT.

• Q2 salmon contract share was expected at 40%–45%; contract prices were below spot realizations.

• Q2 and full-year 2022 earnings were expected to exceed the corresponding 2021 periods; downstream earnings were expected to remain pressured in Q2, with improvement anticipated in H2.

• Feed cost per harvested kg was expected to rise ~NOK 3–4 in 2022 versus 2021; input-cost uncertainty remained high.