Positive Development in Q4 Operations for Lerøy Seafood Group28 February 2013
NORWAY - Lerøy Seafood Group had the second highest quarterly revenue in Q4 2012, with turnover of NOK 2,411 million. By comparison, the Group reported turnover of NOK 2,251 million for the same quarter in 2011.
The Group's operating profit before value adjustment of biomass in Q4 2012 was NOK 136 million compared with NOK 120 million in Q4 2011. The increase in operating profit when compared with the previous year is attributed to a higher volume and somewhat lower production costs.
For Q4 2012, the Group reported a 10 per cent share of contracts on the salmon market and a 16 per cent share of contracts for trout. These figures are lower than the norm expected by the Group, and have to be seen in the light of the low spot price for salmon up to December. Contract prices have seen an increase throughout the quarter but have on average not deviated significantly from the spot prices. The prices achieved by the Group in Q4 2012 are similar to those in Q4 2011. Prices achieved in Q4 2012 have been affected by the fact that more than 40 per cent of the volume of salmon and salmon trout was sold in the month of October, a month of low prices.
Strong biomass growth for the Group throughout 2012 has generated a record-high slaughter volume for Q4 2012, totalling 41 thousand tons gutted weight of salmon and salmon trout. The growth achieved in 2012 has had a positive impact on costs. Production cost for salmon and salmon trout in the fourth quarter 2012 was the lowest achieved by the Group during 2012, and also lower than those realised in Q4 2011.
The associated company, Norskott Havbruk (Scotland-based Scottish Sea Farms Ltd.) has achieved good prices and lower output costs, resulting in a higher profit figure for the fourth quarter of 2012 when compared with the same period last year. Income from associated companies before fair value adjustment of biomass has therefore seen an increase from a loss of NOK 2.3 million in Q4 2011 to a profit of NOK 5.2 million in Q4 2012. Production at Scottish Sea Farms Ltd is strong and the company has expectations for positive development in the future.
The Group's profit figure before tax and value adjustment of biomass in Q4 2012 was NOK 114 million compared with NOK 96 million in Q4 2011.
Financial Summary, 2012
Satisfactory profit in a year of low prices
- 153.4 thousand tons gutted weight of salmon and salmon trout harvested (2011: 136.7)
- Turnover of NOK 9,103 million (2011: 9,177)
- Operating profit before fair value adjustment of biomass NOK 450 million (2011: 1,213)
- Operating profit per kg NOK 2.9 (2011: 8.9)
- Profit before tax and fair value adjustment of biomass NOK 380 million (2011: 1,183)
- The industry spot price for whole superior salmon fell by 17 per cent compared with 2011
- Dividend payments, MNOK 383
- Dividend Net interest-bearing debt was NOK 2,232 million (31.12.2011: 1,593)
- Equity ratio of 51 per cent , similar to end of 2011
The Market Situation and Outlook
The Board of Directors believes that the Group's strategic business development over the past few years, together with underlying productivity improvements and market-oriented structure, ensures a robust platform for earnings in the years to come.
The strong growth in the global supply of Atlantic salmon experienced over the last couple of years is expected to diminish in 2013. The low price level the business has faced over the last 12 months has contributed to a very strong 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 stronger result in 2013 than was achieved in 2012.
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