Seafood products. (Photo: Lerøy Seafood Group)
Lerøy reports strong profit growth in Q2
Friday, August 22, 2014, 05:10 (GMT + 9)
Lerøy Seafood Group ASA obtained an increase in turnover and operating profit in the second quarter this year, mainly due to its 21 per cent growth in harvested salmon and trout compared to the same period in 2013.
In the analysed period, the Group reported turnover of NOK 3,177 million (USD 514.3 million), compared to NOK 2,513 million (USD 406.8 million) in the same period in 2013. And an operating profit before biomass value adjustment of NOK 500 million (USD 80.9 million) versus NOK 462 million (USD 74.8 million) in the same period last year.
Considering the first six months of the year, Lerøy has reported turnover of NOK 6,356 million (USD 1,029 million) compared with NOK 4,845 million (USD 784.4 million) for the same period of 2013.
In the same period analysed, the operating profit before value adjustment for biomass was NOK 1,051 million (USD 170 million) from NOK 832 million (USD 134.7 million) for H1 in 2013. The profit figure before tax and before value adjustment for biomass was NOK 1,129 million (USD 182.7 million) versus NOK 818 million (USD 132.4 million) a year before.
Farming reported an increase in operating profit before biomass adjustment, changing from NOK 400 million (USD 64.7 million) in Q2 2013 to NOK 421 million (USD 68.1 million) in Q2 this year.
“The high temperatures enjoyed during the spring and summer have allowed for increased production, but have also presented several challenges. We will harvest a significantly higher volume in 2014 than in 2013. At the same time, we expect costs for the farming companies to be somewhat higher in the second half of 2014 than in the first half,” says the firm’s CEO Henning Beltestad.
The Group has made substantial investments in increasing capacity for high-quality processing of salmon and trout in recent years and is now working towards gradually filling up this new capacity.
“The underlying development in the VAP segment is very good. The Group has good progress in gradually exploiting the full potential of the investments made in recent years,” explains Beltestad.
He also pointed out that the margin reported by the sales and distribution segment remains lower than the target set by the Group and added that in light of the start-up costs required for several fish-cut facilities during the quarter, the Group is satisfied with the developments.
In reference to the food import ban imposed by Russia, the CEO highlighted that their contract portfolio and substantial industrial downstream activities have offered them a level of protection against the short-term outcome.
However, he recognized the ban represents a significant challenge that will influence earnings not only for Lerøy but the industry as a whole in the near future.
Thus, he voiced a call on the politicians to adapt framework conditions in order to minimise the most acute consequences of these trade barriers.