Lerøy Reports 44% Increase in Third Quarter Operating Profits
The Lerøy Seafood Group, which issued 339 redundancy notices last week, today announced a 44% rise in third quarter operating profit to NOK 831m (£70m).
The operating profit before fair value adjustment figure compares to NOK 579 million (£49 million) in the same period last year, a year-on-year increase of 44%. This is the highest quarterly turnover in the group’s history.
Based in Bergen, Lerøy is a combined fish farming and fishing company that operates one of Norway’s largest whitefish trawler fleets. He also owns a half-share in Scottish Sea Farms (also known as Norskott Havbruk) with SalMar.
Lerøy Seafood said the strong demand for seafood, including the realization of significantly better prices for the group’s main products, is the most important reason for the improvement in profits compared to the corresponding period of the last year.
CEO Henning Beltestad said: “Aquaculture growth during the third quarter and early fourth quarter was somewhat weaker than expected, and as a result the harvest volume forecast has been reduced by 5,000 tonnes for 2022.”
The group’s salmon and trout harvest by volume in Q3 2022 was 56,179 tonnes (compared to 56,397 tonnes in Q3 2021) and the total harvest volume for 2023 is estimated at 202,000 tonnes including the group’s joint venture .
Turning to the tax controversy, he continued: “Lerøy, with a fully integrated value chain, believes that the proposal contains significant weaknesses which are characterized by a lack of understanding of the industry’s complex value chain.
“The proposal already affects Lerøy’s day-to-day operations significantly negatively and will have significant long-term negative consequences for Lerøy and the industry.”
He added: “It involves great uncertainty, a breach of trust and, above all, a proposal that lacks sufficient information on the dynamics of the industry.
“The consequences are very serious for Lerøy and our employees, and we expect the implementation of the proposal to be postponed so that a thorough round of consultation can be carried out with further consideration and broad settlement in the Storting. [Norway’s parliament].”
Lerøy Havfisk had 10 offshore trawlers in operation with a total catch volume of 14,862 tonnes during the quarter, compared to 12,336 tonnes in the third quarter of 2021. Higher catch volume, higher catch rates and good demand were key factors in improving trawler fleet revenues. .
The third quarter report indicates that higher volumes, coupled with a significant decline in salmon and trout prices, are leading to lower margins in farming and higher margins in downstream operations. Price inflation for almost all production factors over the past year has also affected costs for the group.