Lerøy Seafood Group (LSG) Q2 2021 earnings summary

Executive summary

• Q2 revenue rose 13% YoY to NOK 5,304m and EBIT before fair-value adjustments rose 81% to NOK 583m, supported by improved downstream and wildcatch results.

• Farming production was satisfactory, but winter wounds and quality downgrades weighed on realised prices; easing Covid restrictions supported a gradual HoReCa recovery.

Financial highlights

• Q2 EBITDA before fair-value adjustments was NOK 899m versus NOK 606m; profit before tax before fair-value adjustments was NOK 580m versus NOK 303m.

• Reported Q2 EBIT was NOK 1,269m, including NOK 686m in biological-asset fair-value gains; reported profit for the period was NOK 1,010m versus NOK 448m.

• H1 revenue was NOK 10,229m versus NOK 10,017m; EBIT before fair-value adjustments was NOK 1,038m versus NOK 1,138m.

• Positive one-time effects totalled NOK 44m, including NOK 38m from Seafood Danmark’s step acquisition.

Outlook and guidance

• FY 2021 salmon and trout harvest guidance, including associates, was 205,000–210,000 GWT; ~60% of annual volume was expected in H2, with Q3 salmon contract share forecast at ~20%.

• Q3 earnings were forecast to improve significantly from Q2; H2 release-from-stock costs were expected to fall, with lower 2021 cost per kilo than in 2020.

• Regional 2021 harvest expectations were Aurora ~47,000 GWT, Midt ~70,000 GWT and Sjøtroll 75,000 tonnes.

• FY whitefish volume was expected at ~73,000 tonnes; the trawler fleet had a positive quota position.