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Strong Profit Growth For Grieg Seafood

Economics +1 more

NORWAY - In 2009, Grieg Seafood achieved an operating profit before fair value adjustment of biological assets of NOK 154m, compared to NOK -173m in 2008. The profit before tax increased correspondingly from NOK -442m to NOK 318m in 2009.

In fourth quarter, Grieg Seafood reached an operating profit before fair value adjustment of biological assets of NOK 63m, compared to NOK -251m in fourth quarter 2008. This represents an operating profit of 3.94 NOK per kg in fourth quarter 2009, compared to an adjusted operating profit of -4.19 NOK per kg in fourth quarter 2008. The turnover increased with 32% in the quarter, and the volume increase was 23%, according to information from the company.

A significant improvement in the results in Norway and Shetland is the reason for the improved result. Better operational performance and a continued strong salmon market is the reason, says CEO Morten Vike.

The operating profit in the two Norwegian regions (Rogaland and Finnmark) is the highest ever achieved for these two regions. I am equally pleased with the very strong improvement in Shetland, following several weak quarters caused by biological challenges, Morten Vike continues. Shetland is our best performing region in fourth quarter.

The fourth quarter result in Canada is weak. This is mainly due to one incident with high mortalities caused by toxic algae. Due to this we took a write-down in the quarter. We have implemented several measures which will reduce the risk and improve future profitability in Canada, says Vike.

The salmon market remains strong with solid demand despite increasing prices and the global recession. 2009 saw a reduction in the global supply of atlantic salmon due to a strong reduction from Chile. The salmon prices were not very high in the beginning of fourth quarter, but increased during the quarter along with the seasonal increase in demand, said CEO Morten Vike.

The market outlook at the beginning of 2010 remains good. A further reduction in the global supply of atlantic salmon is expected. This has also caused 2010 to start off with historically high prices, says Morten Vike.

Through the last year, Grieg Seafood has increased focus on operational efficiency and measures to reduce cost of production, improve fish health and the biological situation, as well as organizational and competency development. This work has given better results, in particular in Norway, says Mr Vike.

Going forward, the focus on operational efficiency and operational improvements will continue to be our main priority. This shall contribute to further improvements in profitability.

Grieg Seafood expects a harvest volume in 2010 of 68,000 tons, a growth of almost 40 per cent.

The board of directors of Grieg Seafood considers the future prospects of the company in particular, as well as for salmon farming in general, as good. This is expected to give further improvements in results, solidity and cash flow in the future. The board will evaluate the company's dividend policy ahead of the Annual General Meeting which will be held on 27 May 2010.