Highlights

• EBIT before production fee and fair value adjustment of NOK 453 million driven by high prices and improved biological performance
• Sales organization with positive impact on price achievement in all regions
• Operations in Norway less impacted by winter ulcers this winter compared to last year
• Improved cost level in BC
• Good smolt production in Newfoundland, ready for first transfer to sea in May
• Seawater production good in all regions with stable survival and group farming cost of NOK 43.4 per kg, or NOK 41.9 per kg for our Norwegian operations
• Expect harvest of 22 300 tonnes in Q2 2022 and 90 000 tonnes for the full year 2022

Financial results

Operational EBIT for Grieg Seafood was NOK 453 million in the first quarter, up from negative NOK 16 million in the same period last year. Harvest volume was 16,900 tonnes during the period (13,580), which gives an operational EBIT per kg of NOK 26.8 (-1.2).

Farming operations delivered strong results, driven by high prices, improved biological performance and improved price achievement through close coordination between farming and sales. In Finnmark, impact from winter ulcers was significantly lower compared to last year, which partly offset the effect of low average harvest weights and harvesting towards the beginning of the quarter with lower spot prices on price achievement. Rogaland benefited from a favorable harvesting profile throughout the quarter, combined with strong underlying cost performance.

British Columbia delivered solid results, driven by good price achievement from a favorable harvesting profile and VAP premium, in addition to improved farming cost from better biological conditions and increased survival.

In Newfoundland, freshwater production has been according to plan. Fish are healthy and growing well, and first stocking is planned for May.

“The first quarter of 2022 has been unlike anything I have seen before in my 26 years in the salmon farming industry. The market has been incredibly strong, with historic prices across the board. Grieg Seafood achieved the best result we have ever done in a first quarter.

All of our production regions performed well during the quarter, due to improved biological control and increased survival. In Finnmark, we were significantly less impacted by winter ulcers this year compared to 2021, as a result of successful mitigating measures. We are also seeing a positive impact from our integrated sales organization, which has since its establishment changed focus in sales from margin to company profits” says CEO Andreas Kvame in Grieg Seafood.

Outlook

Global harvest of Atlantic salmon in 2022 is expected to decrease by 1% with all major regions seeing declining volumes.

The Covid-19 pandemic have impacted the salmon market the last two years, with shift in demand from HoReCa to the retail segment. The HoReCa segment is on recovery, and it also seems that the pandemic has increased the demand in the retail segment, as consumers have become used to cooking salmon at home. With no supply growth in 2022 and outlook for continuing strong demand, we expect a strong market going forward.

Grieg Seafood targets an annual contract share of 20-50%. Estimated contract share for the Norwegian operations in Q2 2022 is 15%, and 20% for the full year 2022. For 2022, we estimate around 5-10% of our harvested volume to be sold as VAP.

In the second quarter of 2022, expected harvest volume is 22 300 tonnes, distributed as follows:

• Rogaland: 4 800 tonnes
• Finnmark: 8 500 tonnes
• BC: 9 000 tonnes