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Strong underlying market in Europe, but price pressure as a consequence of increased offer and a closed Russian market. Considerable falling/descending prices in the American market.

Highlights – First Quarter 2015
• EBIT before fair value adjustment of biomass was MNOK 70 in Q1 (MNOK 143 in 2014).
• Production has been good throughout the period, with volume indication for 2015 maintained at 72 000 tons. Some of the expected Q1 volume has been moved to Q2.
• High costs on harvested fish in the company’s European regions.
• Higher production and lower costs in BC.
• Strong underlying market in Europe, but price pressure as a consequence of increased offer and a closed Russian market. Considerable falling/descending prices in the American market.
• With the establishment of Ocean Quality in North America, sales from all GSF regions are now handled through this organisation. OQ is now a subsidiary of GSF.

First Quarter Results
EBIT for the Group in Q1 before fair value adjustment of biomass was MNOK 70, against MNOK 87 in 2013. The harvested volume in Q1 was 13 081 tons, against 13 095 in the same period last year, reflecting a decrease of 0.1%.

EBIT per kilo stood at NOK 4.9, after including most of Ocean Quality’s sales. For GSF as a whole, including all of OQ, EBIT per kilo was NOK 5.4.

Salmon prices fell slightly in the first quarter, reflecting the continued closure of the Russian market and a general increase in the supply of salmon compared with Q1 2014. This is not a significant decline, and the European market is characterised by strong demand. In the American market the trend has been significantly weaker.

The level of business based on fixed price contracts was low in Q1 and will remain so in the second quarter, while some increase can be expected in Q3.

PD among fish in Rogaland and harvesting from inefficient locations in Finnmark, including North Cape, resulted in a high cost level in Norway in Q1. The cost of harvested fish was also high in Shetland due to de-licing treatment. In BC the cost of harvested fish is falling thanks to a good biological situation over the last year.

Sea production was stable throughout Q1 in all regions.

The accounts show a profit of MNOK 46 before tax and fair value adjustment of biomass, against MNOK 123 in Q1 2014.
Group sales revenues in Q1 totalled MNOK 990, reflecting a decline of 2.5% on the corresponding period in 2014. Volumes were 0.1% lower.

Outlook
Limited supply-side growth is expected to result in a strong market in the period ahead, but with the possibility of regional variations in the short term.

GSF expects to harvest 72 000 tons in 2015, which includes a harvested volume of around 13 000 tons from BC. In Finnmark and Shetland the harvested volumes will fall slightly. This must be seen in the light of harmonization with the zoning and location structure in these regions and which will also result in slightly higher costs in 2015. These volumes are expected to increase again in 2016. The harvested volume in Q2 2015 is expected to be 16 700 tons.

It is expected high costs for the fish which will be harvested in the company’s European regions in Q2.

Ocean Quality has expanded its activities to include the sale of GSF’s fish in BC. All of the fish produced by GSF is therefore sold through Ocean Quality, and this expected to provide global synergies on the sales side.

Andreas Kvame has been appointed CEO of the company and will take up his position on 1 June 2015. It is expected that he will continue the process of stabilising the biological situation in each of the regions. GSF’s main goals are better licence utilisation and lower costs through continuous improvement of biological performance.

Please find enclosed the company’s Q1 2015 report and presentation.

For further information, please contact:
– CFO/Acting CEO Atle Harald Sandtorv, cell phone: +47 908 45 252.

For more information, please see griegseafood.com

GSF Q1 2015 report
GSF Q1 2015 presentation

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.


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