Lerøy's profit before tax and fair value adjustment of biomass in the first quarter of 2012 was USD 15.04 (Photo: Lerøy Seafood Group)

Lerøy Posts Satisfactory Operating Profit

Leading seafood exporter, Lerøy Seafood Group (Public, OSE: LSG), posted satisfactory operating profits under prevailing market conditions for the first quarter of 2012.

In the first quarter, Lerøy Seafood Group had a turnover of USD 364.17 million (NOK 2,164 million), representing a decline from USD 374.44 million (NOK 2,225 million) for the same period in 2011.

The Group's operating profit before fair value adjustment of biomass was USD 17.36 million (NOK 103.2 million) in the first quarter of 2012, compared with USD 75.02 million (NOK 445.8 million) in the first quarter of the previous year.

Lerøy Seafood Group ASA is the second largest producer of salmon and trout in the world

The decline in operating profit before fair value adjustment of biomass is attributed to substantially lower prices achieved for the Group's main products, Atlantic salmon and salmon trout.

In addition, the Group has expensed a total of USD 8.41 million (NOK 50 million) in write-offs and other costs in relation to the close down of Lerøy Hydrotech's slaughterhouse in Kristiansund.

The Group's underlying production costs have, as a result of very good growth, together with somewhat lower feed prices, slightly fallen in the quarter. The good growth has also materialized in record-high harvest volumes for season. In the first quarter of 2012, realised contract prices have not substantially deviated from prevailing spot prices.

In Q1 2012  Lerøy harvested 36.3 thousand tons gutted weight of salmon and salmon trout

The Group's share of contracts was 27 percent, and the current share of contracts is lower than what the Group considers normal. However, this figure must be viewed in the light of the weak price development experienced over the past quarters.

As a result of considerably lower prices and higher costs for released from stock products, the associated company Norskott Havbruk (owner of the Scotland- based Scottish Sea Farms Ltd) achieved considerably lower net earnings in the first quarter of 2012 compared with the first quarter of 2011. Income from associated companies before fair value adjustment of biomass therefore saw a reduction from USD 4.88 million (NOK 29.0 million) in the first quarter of 2011 to USD 1.5 million (NOK 8.9 million) in the first quarter of 2012.

The Group's profit before tax and fair value adjustment of biomass in the first quarter of 2012 was USD 15.04 (NOK 89.4 million) against USD 77.07 million (NOK 458.0) million in the first quarter of 2011.

Lerøy Seafood Group core activities are distribution, sale and marketing of seafood, processing of seafood, production of salmon, trout and other species, as well as product development

Market Situation and Outlook

The Group expects significantly growth in the global supply of Atlantic salmon the coming year. However, the development in demand is extremely good, and lower prices provide grounds for optimism as to continued positive development in demand.

Good demand together with expectations for improved productivity in the Group's production facilities, including improved biology, provides justification for the Board's positive attitude towards the Group's development.

The Board of Directors currently anticipates a considerably poorer result (before fair value adjustment) for the Group in the second quarter of 2012 than was achieved in the second quarter of 2011, and correspondingly for 2012 as a whole.

About Lerøy Seafood Group

Lerøy Seafood products

Lerøy Seafood Group is the leading exporter of seafood from Norway and is in business of meeting the demand for food and culinary experiences in Norway and internationally by supplying seafood products through selected distributors to producers, institutional households and consumers.

The Group's core activities are distribution, sale and marketing of seafood, processing of seafood, production of salmon, trout and other species, as well as product development.

The Group operates through subsidiaries in Norway, Sweden, France and Portugal and through a network of sales offices that ensure its presence in the most important markets.

Source: Lerøy Seafood Group

Margaret E.L. Stacey
Editor Companies and Products
editorial@fis.com
www.fis.com

Address:	Bontelabo 2 - P.O. Box 7600
City:	Bergen
State/ZIP:	(NO-5020)
Country:	Norway
Phone:	+47 55 213 650
Fax:	+47 55 213 632
E-Mail:	hallvard@leroy.no
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