Lerøy Seafood Group ASA: Q4 2022 Results

GROWTH IN SEAFOOD DEMAND BRINGS STRONG REVENUE IN 2022

Lerøy posted record revenue of NOK 26.6 billion in 2022. This reflects a year of high prices, driven by strong demand for seafood. Operating profit before fair value adjustments was MNOK 3,195 compared to MNOK 2,518 in 2021.

"Seafood markets were strong in 2022. Like other industries, we also experienced cost pressure,” says CEO Henning Beltestad. "The other defining event of the year was the resource rent tax proposal. We’ve already seen this have significantly negative effects on investments in coastal regions. This is extremely unfortunate for Norway as a seafood nation, for the industry and for everyone who works in it,” Beltestad continues.

Lerøy’s consultation response to the Ministry of Finance can be read here (in Norwegian): https://www.leroyseafood.com/globalassets/leroy-seafood/about-leroy/news/norge-taper/220401-leroy-horingssvar.pdf

Based on the results for 2022, the Board of Directors has recommended a dividend of NOK 2.5 per share. The proposal will be presented for decision at the Annual General Meeting in May.

OPERATING PROFIT BEFORE FAIR VALUE ADJUSTMENT OF NOK 800 MILLION IN Q4 2022

Operating profit before fair value adjustments was NOK 800 million in Q4 2022, compared with NOK 902 million in the same period of 2021. The decrease can be attributed to lower earnings for Wild Catch because of lower catch volumes, as well as lower margins in VAP S&D than in Q4 2021.

"The earnings improvement in VAP S&D from last quarter is positive, and a trend that we expect to continue in 2023. Within Farming, we experienced challenging biology in Lerøy Midt and Lerøy Sjøtroll, affecting growth, and the harvest volume for 2023 is now estimated at 193,500 GWT. We have initiated several measures throughout the value chain, which will gradually show positive effects,” says Beltestad.

CREATING THE MOST EFFICIENT AND SUSTAINABLE VALUE CHAIN FOR SEAFOOD

By 2025, Lerøy shall have a market-leading EBIT per kg through the value chain, EBIT for VAP S&D of NOK 1.25 billion, EBIT for Wild Catch of NOK 500 million and a harvest volume in Norway of 205,000 tonnes. The Group’s revenue shall reach NOK 50 billion by 2030.

"We’re standing by these ambitious but achievable targets. The common denominator for success is operational improvements. We have clearly defined initiatives for achieving our goals. At the same time, we have to acknowledge that the proposed resource rent tax brings increased uncertainty,” Beltestad says.

Lerøy has set a target of reducing its greenhouse gas emissions by 46% by 2030. Lerøy Seafood Group is ranked in the top three in the Coller FAIRR Protein Producer Index, making it one of the most sustainable protein producers in the world. Lerøy was mentioned in PwC Norway’s report "Klimaindeksen for 2022” as one of ten big companies in Norway that are cutting greenhouse gas emissions in line with the Paris Agreement.

"We continue to take new steps to further consolidate our position as a producer of sustainable seafood. Key to this are innovative partnerships with feed suppliers to evaluate new ingredients. We are also working to reduce emissions from transport and evaluate alternative fuels for our fishing fleet. Our integrated value chain puts us in a unique position to reach our sustainability targets,” says Beltestad.

Through cooperation our employees work hard every day to create the most efficient and sustainable value chain for seafood. I’d like to thank them for the work they do every day to help the company achieve this,” Beltestad finishes.

Queries may be addressed to the CEO, Henning Beltestad, or the CFO, Sjur S. Malm.

ABOUT LERØY SEAFOOD GROUP ASA

Lerøy Seafood Group ASA is a global seafood corporation with its head office in Bergen. The Group’s approx. 5,500 employees process between 350,000 and 400,000 tonnes of seafood every year via our value chain, corresponding to around 5 million meals every day. The Group has a vertically integrated value chain for red fish and whitefish, as well as significant activities using third-party products.

The Group’s values – open, honest, responsible and creative – shall underpin everything we do, and we work hard to achieve our goal of creating the world’s most efficient and sustainable value chain for seafood. The target for return on capital employed (ROCE) is 18%. The Group has set a number of targets within sustainability, including cutting greenhouse gas emissions by 46% by 2030.

Attachments

• LSG Q4 22 presentation
• LSG Q4 22 report