Salmon processing plant. (Photo Credit: Lerøy Seafood)
Q1 brings third-highest turnover ever for Lerøy Seafood Group
Monday, May 20, 2013, 05:00 (GMT + 9)
The prices achieved by Lerøy Seafood Group for Atlantic salmon and trout in the first quarter of 2013 are much higher than in Q1 2012 and production costs for both species in the same period are substantially lower than in Q1 2012 and also Q4 2012, but the group estimates that higher feed costs will yield higher production costs this year.
As a result, in Q1 2013, Lerøy had a turnover of NOK 2.3 billion (EUR 305.4 million) -- the third highest in the history of the Group -- up from NOK 2.2 billion (EUR 292.2 million) year-on-year and an operating profit before value adjustment for biomass of NOK 369 million (EUR 49 million) versus NOK 103 million (EUR 13.7 million).
The expected price increase for Atlantic salmon and trout in Q1 generated an increase in sales despite the 8 per cent fall in slaughtered volume year-on-year.
Lerøy's production costs per kg of produced salmon and trout are both down compared to Q1 2012 and 2012 as a whole. The lower production volume is attributed to lower sea temperatures and the slaughter of many fish due to infection by pancreas disease (PD) in the Central Norway region last year.
The Group’s results are closely related to developments in seafood markets, especially Atlantic salmon and trout prices, which make up the largest part of total revenues. While the prices of these species so far this year have looked good, the Board of Directors believes they will remain volatile.
Other risk factors in the industry facing the Group are financial, operational and biological issues, plus the cost of input factors. Norwegian aquaculture and fish processing in Norway and the EU are exposed to potential long-term political trade barriers imposed by the EU Commission.
Further, Russia is now a growing market for Atlantic salmon and trout, making admission to this market an important factor for the Group and the general demand for salmon and salmon trout, the Group said.
Finally, the Board maintains a strong focus on purposeful and systematic management of all risk factors, which it considers essential to secure long-term value creation for shareholders, employees and society in general. The Group’s overall financial strategy is to balance and ensure financing, suitable financial covenants, liquidity, customer credit, currency and market risk, and it is also giving considerable importance to having efficient and sustainable solutions in all parts of the Group’s value chain.
- Lower salmon prices dent Lerøy Seafood Group's 2012 profit
By Natalia Real