Lerøy Seafood Group (LSG) Q2 2023 earnings summary

Executive summary

• Record Q2 revenue of NOK 7,668m, up 17% YoY, and operational EBIT of NOK 950m, up 2%, despite 10% lower salmon and trout harvest volume.

• Earnings improved in VAP, sales and distribution and Wild Catch, while Farming earnings declined as costs per kilo rose faster than realised prices.

• A NOK 1.714bn one-off resource-tax implementation effect drove reported EPS to NOK -2.11; EPS excluding the effect was NOK 0.77.

Financial highlights

• Q2 operating EBITDA was NOK 1,307m, up 5% YoY; depreciation and amortisation was NOK 396m versus NOK 322m.

• Operational EBIT per kg across Farming and VAP, sales and distribution was NOK 28.7 versus NOK 25.2 in Q2 2022.

• H1 revenue was NOK 14,640m, up 21% YoY; operating EBITDA was NOK 2,644m and operating EBIT was NOK 1,939m.

• Salmon and trout harvest volume fell 10% YoY to 29,659 GWT; Wild Catch volume rose 27% to 23,709 tonnes.

Outlook and guidance

• 2023 salmon and trout harvest guidance was ~181,500 GWT including the joint venture; Norwegian operations were expected to harvest ~168,000 GWT.

• Farming release-from-stock costs were expected to be lower in H2 than Q2; VAP, sales and distribution earnings were expected to improve versus H2 2022.

• 2025 Norwegian harvest target is 205,000 tonnes; 20% of stocked salmon is targeted to be in shielded technologies from Q1 2024.

• 2024 ICES quota advice indicated cod down 20%, haddock down 25% and southern saithe up 25%; Wild Catch earnings were expected to improve in 2023 versus 2022.