Quarterly Report • Nov 11, 2015
Quarterly Report
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Austevoll Seafood ASA
Alfabygget N-5392 Storebø NORWAY
www.auss.no
| Key figures for the Group 04 | |
|---|---|
| Q3 2015 05 | |
| Operating segments 05 | |
| Cash flows 07 | |
| Financial factors at the end of September 2015 07 | |
| Cash flows 07 | |
| Balance sheet as at 30 September 2015 07 | |
| Risks and uncertainties 07 | |
| Shareholders 08 | |
| Market and outlook 08 | |
| The Group 08 | |
| Note 1 Accounting policies 12 | |
| Note 2 Related party transactions 12 | |
| Note 3 Biological assets 12 | |
| Note 4 Operating segments 14 | |
| Note 5 Associates 15 | |
| Note 6 Business combinations 15 | |
| Note 7 List of the 20 largest shareholders 16 |
Good earnings for the pelagic segment in Europe.
As normal, low season for pelagic segment in South America.
Difficult quarter for farming.
Second fishing season in Peru starts on 17 November, with a total quota of 1.11 million tonnes.
| (restated) | (restated) | ||||
|---|---|---|---|---|---|
| All figures in NOK 1,000 | Q3 2015 | Q3 2014 | YTD Q3 2015 | YTD Q3 2014 | 2014 |
| Operating revenue | 3 791 291 | 3 391 342 | 11 444 921 | 10 639 488 | 14 344 177 |
| EBITDA | 446 661 | 439 580 | 1 741 353 | 1 938 174 | 2 516 189 |
| EBITDA % | 12 % | 13 % | 15 % | 18 % | 18 % |
| EBIT | 255 027 | 281 406 | 1 208 850 | 1 482 204 | 1 855 768 |
| Pre tax profit | 331 209 | 14 212 | 631 075 | 461 450 | 1 346 473 |
| Earnings per share (EPS) from continuing operations | 0,87 | 0,24 | 1,68 | 1,38 | 2,76 |
| Total assets | 24 268 413 | 21 461 308 | 23 343 997 | ||
| Equity | 12 723 625 | 11 305 484 | 12 360 106 | ||
| Equity ratio | 52 % | 53 % | 53 % | ||
| Net interest bearing debt (NIBD)/ | 4 380 395 | 3 969 855 | 3 959 866 |
Group operating revenue in Q3 2015 totalled NOK 3,791 million, compared with NOK 3,391 million in Q3 2014.
EBITDA for Q3 2015 was NOK 447 million, up from NOK 440 million in Q3 2014.
The company reported an increase in turnover from the segments for salmon and trout, and pelagic fish. The pelagic segment also reported an increase in EBITDA when compared with Q3 2014, while salmon and trout saw a fall in EBITDA when compared with the same period in 2014.
The EAEU customs union (Eurasian Economic Union) – covering several of Russia's neighbouring countries – introduced restrictions on the import of salmon and trout in August 2015. These trade barriers have had a substantially negative impact on the salmon market, and even more so on the trout market. The previous interim report notified sustained extraordinarily high release from stock costs for salmon and trout on an historical scale. This trend has remained in the third quarter, based as expected on high production costs during the previous winter in Hordaland. The release from stock costs throughout Q3 were, however, higher than expected due to the imposed slaughter of fish in Central Norway during the late summer and autumn.
EBIT before value adjustment for biomass in Q3 2015 was NOK 255 million (Q3 2014: NOK 281 million). EBIT after value adjustment for biomass in Q3 2015 was NOK 331 million (Q3 2014: NOK 28 million). The IFRS biomass adjustment for the quarter was positive at NOK 76 million (Q3 2014: negative at NOK 254 million).
Income from associates in Q3 2015 totalled NOK 69 million (Q3 2014: NOK 56 million).
The largest associates are Norskott Havbruk AS (owner of the Scottish fish-farming company Scottish Sea Farms Ltd.) and Pelagia AS.
The Group's net interest expense in Q3 2015 totalled NOK 57 million (Q3 2014: NOK 51 million).
Profit before tax for the quarter totalled NOK 331 million (Q3 2014: NOK 14 million). Profit after tax was NOK 269 million (Q3 2014: NOK 34 million).
The Group is financially sound with an equity ratio of 52%. The Group had net interest-bearing debt totalling NOK 4,380 million at 30 September 2015, compared with NOK 3,970 million at 30 September 2014.
Austral Group S.A.A (Austral) is involved in fishing, production of fishmeal and oil, and consumer products. Austral holds 6.87% of the total quota for anchoveta in Central/North Peru and just under 4% of the quota in South Peru. In addition, the company has fishing rights for horse mackerel and mackerel. Anchoveta is used to produce fishmeal and oil, and horse mackerel/mackerel is fished for consumer products. The main fishing seasons for anchoveta in Central/North Peru are from April to July and November to January. Following restructuring, fishmeal and oil are now produced in four factories, located in Coishco, Chancay, Pisco and Ilo. The company also has two factories producing consumer products that share premises with the fishmeal and oil factories in Coishco and Pisco.
The fishing season for anchoveta in Central/North Peru started on 1 April, and the total quota for the season was set at 2,580,000 tonnes. At the end of the second quarter, Austral – as notified – had fished almost its entire quota for the first season. As normal, the company therefore had a low level of activity in the third quarter.
At the end of the third quarter, the company has sold 98% of its production of fishmeal from the first fishing season in 2015.
Operating revenue in Q3 2015 totalled NOK 323 million (Q3 2014: NOK 245 million) and EBITDA NOK 50 million (Q3 2014: NOK 24 million).
Approx. 21,100 tonnes of fishmeal and oil were sold in Q3 2015, compared with approx. 19,200 tonnes in the same quarter of 2014.
Peru is one of the largest producers of fishmeal and oil in the world. Production volumes in Peru normally have a direct influence on the prices for fishmeal worldwide.
On 4 November, the authorities in Peru announced the total quota for the second fishing season in 2015 at 1.11 million tonnes. The season starts on 17 November and ends on 31 January 2016. The quota established for this season in 2014 was 0.
Foodcorp Chile S.A (FC) is involved in fishing, consumer products, and production of fishmeal and oil. FC has a quota of 9.1% for horse mackerel in South Chile in addition to a quota for sardine/ anchoveta. All FC's facilities share the same premises in Coronel.
The main season for horse mackerel fishing is from December to July. The main season for sardine/anchoveta fishing is divided into two periods. The first season starts in March and ends in July/ August, and the second season normally starts in October/November.
During the third quarter, the company fished approx. 16,800 tonnes of horse mackerel/mackerel. By the end of the third quarter, the company had caught its entire quota for 2015. There was no fishing for horse mackerel/mackerel in the same quarter in 2014, and the remaining quota of approx. 4,900 tonnes was caught in Q4 2014. The 2015 quota for anchoveta/sardines has been increased, and the total quota for the year is now 512,000 tonnes (2014: 602,000 tonnes). The fishing season started on 4 November.
Operating revenue in Q3 2015 totalled NOK 140 million (Q3 2014: NOK 101 million) and EBITDA amounted to NOK 11 million (Q3 2014: NOK -5 million).
Chile has seen a significant decline in horse mackerel fishing since 2008/2009. A common fish stock management scheme was implemented in 2012. Responsibility for the scheme is assigned to the South Pacific Regional Fisheries Management Organization. A total quota for fish stocks was introduced for the first time in 2012 in order to rebuild biomass. The total quota has subsequently seen a slight increase over the years. We consider that the current practice of conservative management lays the foundations for a sustainable biomass in the long term and, consequently, increased activities for the Group's business in Chile.
Since 2012, FC has had an operating partnership with Alimar S.A. This contract expires on 31 December 2015. From 2016 inclusive, the two companies will now operate their vessels and production facilities separately.
In Q3 2015, LSG reported operating revenue of NOK 3,291 million (Q3 2014: NOK 3,036 million) and EBITDA before value adjustment for biomass of NOK 365 million (Q3 2014: NOK 398 million).
The company has harvested 40,700 tonnes gutted weight of salmon and trout in the quarter, down 2% on 41,500 tonnes in Q3 2014.
The spot price for salmon in Q3 2015 was up by NOK 3 per kg compared with Q2 2015, and up 16% on Q3 2014. Nonetheless, the prices for different sizes of salmon have differed substantially throughout the quarter. Due to the imposed slaughter of salmon, the market has been supplied with unusually large volumes of smaller sized salmon. The prices realised by LSG and the release from stock costs have suffered from size distribution in the quarter. The ban on imports to the EAEU customs zone, which includes several neighbouring countries to Russia, has had a particularly negative impact on the prices realised for trout. Prices realised per kg trout are approximately NOK 3.5 lower than for salmon. Prices realised in West Norway were lower due to the fact that 44% of the slaughtered volume in the quarter was trout. LSG's contract coverage for the third quarter of 2015 was 33%.
Release from stock costs were significantly higher in Q3 2015 compared with Q2 2015, and remain at an extraordinarily high level historically. One important factor here is higher feed costs, but the major factor is the increase in direct and indirect costs related to measures to comply with the statutory limits for salmon lice. The lice situation in parts of Central Norway has been a major problem during the quarter, but the Group's capacity to face these challenges has now been substantially improved thanks to measures including the increase in well boat capacity, which is now much higher than during the summer and third quarter of the year. The difficult situation has had a very negative effect on costs for the spring 2014 and autumn 2014 generation in Lerøy Midt with increased treatment costs and imposed slaughter. Uncertainty around future biological performance by Lerøy Midt is higher than normal. The production costs for the autumn 2014 generation will be higher than normal and will generate higher release from stock costs for these fish when they are slaughtered in Q4 2015 and Q1 2016.
Lerøy Midt has implemented a number of measures to counteract this, including improved availability of cleaner fish for the Group as a whole in 2016 and a significant increase in the capacity to provide treatment that does not involve medicines.
Lerøy Sjøtroll continues to be impacted by repercussions of the particularly challenging biological situation in Hordaland in the second half of 2014/winter of 2015. Release from stock costs in Q3 2015 have shown an increase when compared with Q2 2015. There has been a significant increase in focus on cleaner fish throughout 2015, including investments to become a major producer of lumpfish. A good supply of cleaner fish together with know-how and experience in using them are important prerequisites for the expected lower costs. LSG is already seeing extremely good results at individual locations and expects a positive development in this area in 2016.
Lerøy Aurora reported release from stock costs for Q3 2015 that were lower than in Q2 2015. Due to higher feed costs, LSG expects to see an increase in release from stock costs in this region in Q4 2015 and in 2016.
Overall, there is significant variation in the performance of LSG's different farming regions in the quarter.
LSG has a total of 143 licences: 26 in Troms, 55 in Central Norway and 62 in West Norway.
LSG has invested significantly in increasing its capacity for high-value processed salmon and trout in recent years, and its marketing work, coupled with good domestic and international customers, has resulted in improved capacity utilisation. The company's strategy has included making significant investments in processing facilities, in order to be part of the "revolution" in the distribution of fresh seafood. These investments involve what are known as "fish-cuts": processing facilities where freshness, service and proximity to the customer are key. Today, LSG has a number of fish-cut facilities across Europe.
BRBI owns two combined pelagic ring net/trawling vessels, each with 650 basic tonnes for ring nets and 1,425 trawling quota for blue whiting. In addition, the company is the majority shareholder in a ring net vessel with 471 basic tonnes. In 2014, the company invested in a vessel to fish for snow crab. In addition, BRBI owns seven licences for farming Atlantic salmon/trout in Hordaland.
BRBI reported operating revenue of NOK 85 million in Q3 2015 (Q3 2014: NOK 71 million) and EBITDA before value adjustment for biomass of NOK 20.1 million (Q3 2014: NOK 18 million).
The ring net vessels have fished for mackerel in the third quarter, reporting successful operations and good earnings for the quarter. The slaughter volume of salmon and trout in Q3 2015 was 700 tonnes, compared with 1,326 tonnes in the same period of 2014. The volume of snow crab produced has been slightly lower in Q3 2015 when compared with the previous quarter, partly due to the fact that the snow crab sheds its shell during this period.
In accordance with IFRS 11, AUSS' consolidated financial statements report the joint venture Pelagia AS as an associate. In the notes to the financial statements for this segment (Note 4) and in the description of the segment in this report, the financial information comprises 50% of Pelagia AS' total revenue, EBITDA, EBIT and sales volume. This corresponds to AUSS' equity interest in Pelagia AS.
Turnover for the quarter was NOK 710 million (Q3 2014: NOK 615 million) and EBITDA totalled NOK 103 million (Q3 2014: NOK 77 million).
Normally, the third quarter has a lower supply of raw materials depending on when the mackerel season starts. The total supply of raw materials to the Group (100%) for fishmeal and oil production was approx. 134,000 tonnes in the quarter, compared to approx. 131,000 tonnes in Q3 2014. The volume of raw materials received for consumer products was 80,000 tonnes, compared with 96,000 tonnes in 2014.
Cash flow from operating activities for Q3 2015 was NOK 412 million (Q3 2014: NOK 90 million). Cash flow from investing activities for Q3 2015 was NOK -2 million (Q3 2014: NOK -96 million). In Q3 2015, the Group has received dividends from associates totalling NOK 174 million. Cash flow from financing activities for Q3 2015 was NOK -219 million (Q3 2014: NOK 379 million). Cash flow from financing activities mainly comprises payment of ordinary instalments and changes in short-term credits. Net change in cash for the Group in Q3 2015 was NOK 192 million (Q3 2014: NOK 374 million). The Group's cash and cash equivalents at 30 September 2015 totalled NOK 2,420 million, compared with NOK 1,992 million at 30 September 2014.
The Group reported operating revenue of NOK 11,445 million as of September 2015 (YTD Q3 2014: NOK 10,639 million). EBITDA before value adjustment for biomass at end September 2015 was NOK 1,741 million (YTD Q3 2014: NOK 1,938 million).
The increase in turnover has been generated by activities within both salmon and trout and the pelagic segment. The decline in EBITDA can be attributed to the salmon and trout segment, and is mainly a result of higher release from stock costs. The pelagic segment in total reported an increase in EBITDA. EBIT before value adjustment for biomass at end September 2015 was NOK 1,209 million (YTD Q3 2014: NOK 1,482 million). The IFRS biomass adjustment at end September 2015 was negative at NOK 517 million. The corresponding IFRS biomass adjustment for the same period in 2014 was negative at NOK 997 million). EBIT after value adjustment for biomass at end September 2015 was NOK 691 million (YTD Q3 2014: NOK 485 million).
Income from associates at end September 2015 totalled NOK 170 million (YTD Q3 2014: NOK 131 million). The Group's net interest expenses at end September 2015 totalled NOK 170 million (YTD Q3 2014: NOK 148 million).
Profit before tax and biomass adjustment at end September 2015 was NOK 1,164 million, compared with NOK 1,534 million for the same period in 2014.
Profit after tax at end September 2015 was NOK 474 million (YTD Q3 2014: NOK 384 million).
Cash flow from operating activities at end September 2015 was NOK 1,131 million (YTD Q3 2014: NOK 1,283 million). Tax payments totalled NOK 400 million compared with NOK 395 million for the same period in 2014. Cash flow from investing activities at end September 2015 was NOK -494 million (YTD Q3 2014: NOK 653 million). The positive cash flow in 2014 resulted from a cash inflow of more than NOK 1,000 million to AUSS in connection with the establishment of Pelagia AS. Cash flow from financing activities at end September 2015 was NOK -430 million (YTD Q3 2014: NOK -1,392 million). The Group paid dividends of NOK 684 million compared with NOK 594 million in the same period in 2014. In 2015, AUSS established an unsecured bond loan of NOK 500 million. In 2014, AUSS reduced a long-term credit facility by NOK 740 million. Net change in cash for the Group at end September 2015 was NOK 207 million (YTD Q3 2014: NOK 545 million). The Group's cash and cash equivalents at 30 September 2015 totalled NOK 2,420 million, compared with NOK 1,992 million at 30 September 2014.
At 30 September 2015, the Group had a balance sheet total of NOK 24,268 million, compared with NOK 21,461 million at 30 September 2014 and NOK 23,344 million at 31 December 2014.
The Group is financially sound with book equity at the end of Q3 2015 of NOK 12,724 million, equivalent to an equity ratio of 52%. At 30 September 2014, the Group had book equity of NOK 11,305 million, equivalent to an equity ratio of 53%.
Net interest-bearing debt was NOK 4,380 million at 30 September 2015 compared with NOK 3,970 million at 30 September 2014.
The Group's risk exposure is described in the Annual report 2014. The Group's activities are essentially global and will always be impacted to varying degrees by developments in the global economy. In light of the turmoil in the global economy in recent years, including political trade barriers and geopolitical risk, the general consensus is that macroeconomic uncertainty is still greater than normal. Although this situation may have negative effects on the real economy in most markets, we assess that AUSS' core activities are founded on long-term sustainable assets within interesting segments of the global seafood industry.
The Group is exposed to risk related to the value of the Group's assets. Risk arises mainly as a result of changes in the prices of raw materials and finished products, to the extent that these changes impact the company's competitiveness and earnings potential over time. Operational factors, such as marine biomass, fishing conditions and price trends for the Group's input factors, are other key parameters that have an impact on risk for the Group.
Changes in fishing patterns and quota adjustments mean fluctuations in catch volumes from quarter to quarter and year to year, and hence in utilisation of the Group's production facilities. The difficult situation encountered by Austral Group in 2014 provides a practical illustration of this. The seasonal fluctuations in catch volumes cause similar fluctuations in the quarterly key figures.
The majority of the Group's debt is at floating interest rates, but fixed-rate contracts have been entered into for approx. 17% of the Group's interest-bearing debt.
The Group is exposed to fluctuations in foreign exchange rates, particularly the EUR, GBP, USD, Chilean peso and Peruvian sol. Measures to reduce this risk include forward contracts and multi-currency overdraft facilities. Furthermore, parts of the longterm debt are adjusted in relation to earnings in the same currency.
The company had 4,046 shareholders at the end of the third quarter 2015. The number of shareholders at the start of the quarter was 3,932.
The share price was NOK 41.10 at the start of Q3 2015 and NOK 53.00 at the end of the quarter.
A list of the 20 largest shareholders can be found in Note 7.
Price trends for fishmeal have been on the increase in the third quarter, particularly with a view to the uncertainty caused by the "El Niño" weather phenomenon in South America and its possible impact on the second fishing season in Peru.
The quotas for the second fishing season in Peru were announced on 4 November, with a total quota of 1.11 million tonnes, start-up on 17 November and close of season on 31 January 2016. For the corresponding season of 2014, the quota was set at 0. Realised prices for fishmeal FOB Peru (superprime) are currently USD 1,900-1,950, while CIF Hamburg prices for fishmeal (standard 64%/65%) are USD 1,530. Given the quota set for the second fishing season this year, no material changes are currently expected in fishmeal and fish oil prices.
The Group's production of consumer products takes place in Europe and South America. Most of the fish received in Europe in the third quarter was mackerel. The third quarter, as normal, has been a low season in South America. The ban on imports to Russia introduced on 7 August 2014 and the introduction of import quotas to Nigeria in 2014 have led to the companies working actively to find alternative markets for the products traditionally sold mainly to Russia and Nigeria. The weakness of the Norwegian krone has on the whole helped to make Norwegian seafood products more competitive globally. However, we are also aware that the local currencies in some of our traditional herring markets (including Ukraine) are falling against the USD, resulting in higher prices for consumers in the markets concerned. Despite this, we are confident that the Group's products on these markets will fare well in competition with alternative sources of protein.
The ban on imports to Russia represents a significant short-term challenge for both the Norwegian seafood industry and market participants in Russia and some of its neighbouring countries. Major efforts are under way to boost sales to alternative markets, and the results of these efforts are expected to emerge in the long term. Towards the end of August 2015, the EAEU (comprising several neighbouring countries to Russia) imposed a ban on import of salmon and trout. As a result, the prices realised for trout in Q3 2015 were again significantly lower than the prices realised for salmon. The market for high-quality seafood is global and is experiencing strong growth. In light of the market prospects and the segment's potential for cost reductions, the outlook is positive.
The Group is financially sound, has shown good development and currently has a strong position on a number of seafood markets worldwide. The Group's strategy going forward is to continue to grow and further develop within its current operating segments. The Group has and shall continue to have the financial flexibility to support its strategy of further organic growth, carry out strategic acquisitions and sustain the company's dividend policy.
Bearing in mind the prevailing framework conditions and the challenges within the seafood industry, the Board of Directors is essentially satisfied with the Group's results for Q3 2015.
The Group's strong position within the global seafood business gives grounds for a positive outlook for the Group's future development.
Storebø, 10 November, 2015 The Board of Directors of Austevoll Seafood ASA
| (restated) | (restated) | ||||
|---|---|---|---|---|---|
| All figures in NOK 1.000 | Q3 2015 | Q3 2014 | YTD Q3 2015 | YTD Q3 2014 | 2014 |
| Operating revenue | 3 791 291 | 3 391 342 | 11 444 921 | 10 639 488 | 14 344 177 |
| Raw material and consumables used | 2 378 849 | 2 134 762 | 7 023 284 | 6 364 023 | 8 529 316 |
| Salaries and personnel expenses | 477 202 | 424 737 | 1 291 420 | 1 149 019 | 1 607 412 |
| Other operating expenses | 488 579 | 392 263 | 1 388 864 | 1 188 272 | 1 691 260 |
| Operating profit before depreciation (EBITDA) | 446 661 | 439 580 | 1 741 353 | 1 938 174 | 2 516 189 |
| Depreciation and amortisation | 193 721 | 158 852 | 538 768 | 460 391 | 630 308 |
| Impairment | -2 087 | -678 | -6 265 | -4 421 | 30 113 |
| EBIT before fair value biomass adjustment | 255 027 | 281 406 | 1 208 850 | 1 482 204 | 1 855 768 |
| Fair value adjustment biomass | 76 002 | -253 670 | -517 376 | -996 863 | -379 758 |
| Operating profit | 331 029 | 27 736 | 691 474 | 485 341 | 1 476 010 |
| Income from associated companies | 68 773 | 55 639 | 170 441 | 131 128 | 217 381 |
| Net interest expenses | -57 308 | -51 067 | -169 778 | -147 594 | -197 074 |
| Net other financial items (incl. agio/disagio) | -11 285 | -18 096 | -61 062 | -7 425 | -149 844 |
| Profit before tax | 331 209 | 14 212 | 631 075 | 461 450 | 1 346 473 |
| Income tax expenses | -62 089 | 19 437 | -157 228 | -77 240 | -345 802 |
| Net profit | 269 120 | 33 649 | 473 847 | 384 210 | 1 000 671 |
| Profit to non-controlling interest | 93 724 | -14 648 | 135 395 | 107 209 | 445 561 |
| Profit to controlling interests | 175 396 | 48 297 | 338 452 | 277 001 | 555 110 |
| Earnings per share (EPS) | 0,87 | 0,24 | 1,68 | 1,38 | 2,76 |
| Diluted EPS | 0,87 | 0,24 | 1,68 | 1,38 | 2,76 |
| (restated) | (restated) | ||||
|---|---|---|---|---|---|
| All figures in NOK 1.000 | Q3 2015 | Q3 2014 | YTD Q3 2015 | YTD Q3 2014 | 2014 |
| Net earnings in the period | 269 120 | 33 649 | 473 847 | 384 210 | 1 000 671 |
| Other comprehensive income | |||||
| Currency translation differences | 178 235 | 58 814 | 359 098 | 98 995 | 562 141 |
| Other comprehensive income from associated companies | 10 | -15 | -16 | ||
| Cash flow hedges | -25 080 | -8 819 | 46 675 | -39 896 | -72 200 |
| Change in value available for sale financial assets | - | ||||
| Others incl. tax effect | -11 777 | -5 488 | -12 920 | -6 895 | - |
| Total other comprehensive income | 141 378 | 44 517 | 392 853 | 52 189 | 489 925 |
| Comprehensive income in the period | 410 498 | 78 166 | 866 700 | 436 399 | 1 490 596 |
| Allocated to; | |||||
| Minority interests | 120 865 | -22 133 | 179 699 | 66 988 | 501 732 |
| Majority interests | 289 633 | 100 299 | 687 001 | 369 411 | 988 864 |
| (restated) | |||
|---|---|---|---|
| All figures in NOK 1.000 | 30.09.2015 | 30.09.2014 | 31.12.2014 |
| Assets | |||
| Intangible assets | 7 975 535 | 7 286 688 | 7 480 567 |
| Vessels | 707 944 | 626 095 | 699 923 |
| Property, plant and equipment | 4 579 750 | 3 983 438 | 4 249 364 |
| Investments in associated companies | 1 637 573 | 1 375 252 | 1 563 187 |
| Investments in other shares | 33 415 | 32 313 | 35 773 |
| Other long-term receivables | 56 249 | 75 438 | 64 775 |
| Total non-current assets | 14 990 466 | 13 379 224 | 14 093 589 |
| Inventories | 4 559 478 | 4 026 697 | 4 721 989 |
| Accounts receivable | 1 618 056 | 1 462 479 | 1 637 571 |
| Other current receivables | 680 333 | 600 450 | 692 700 |
| Cash and cash equivalents | 2 420 080 | 1 992 458 | 2 198 148 |
| Total current assets | 9 277 947 | 8 082 084 | 9 250 408 |
| Total assets | 24 268 413 | 21 461 308 | 23 343 997 |
| Equity and liabilities | |||
| Share capital | 101 359 | 101 359 | 101 359 |
| Own shares | -35 306 | -35 306 | -35 306 |
| Share premium | 3 713 549 | 3 713 549 | 3 713 549 |
| Retained earnings and other reserves | 4 826 479 | 3 899 440 | 4 541 467 |
| Non-controlling interests | 4 117 544 | 3 626 442 | 4 039 037 |
| Total equity | 12 723 625 | 11 305 484 | 12 360 106 |
| Deferred tax liabilities | 2 357 115 | 2 117 320 | 2 407 445 |
| Pensions and other obligations | 163 342 | 118 024 | 169 447 |
| Borrowings | 5 351 111 | 4 855 106 | 4 794 922 |
| Other long-term liabilities | 15 812 | 13 492 | 16 104 |
| Total non-current liabilities | 7 887 380 | 7 103 942 | 7 387 918 |
| Short term borrowings | 796 050 | 631 338 | 741 009 |
| Overdraft facilities | 653 314 | 475 869 | 622 083 |
| Account payable | 1 258 866 | 1 094 729 | 1 172 648 |
| Other current liabilities | 949 178 | 849 946 | 1 060 233 |
| Total current liabilities | 3 657 408 | 3 051 882 | 3 595 973 |
| Total liabilities | 11 544 788 | 10 155 824 | 10 983 891 |
| Total equity and liabilities | 24 268 413 | 21 461 308 | 23 343 997 |
| NIBD | 4 380 395 | 3 969 855 | 3 959 866 |
| Equity ratio | 52 % | 53 % | 53 % |
| Equity at period end | 12 723 625 | 11 305 484 | 12 360 106 |
|---|---|---|---|
| Total changes in equity in the period | 363 519 | -158 707 | 895 915 |
| Other | - | - | - |
| Effect option programme | - | - | - |
| Transactions with non-controlling interest | - | -1 082 | -1 082 |
| Business combinations/acquisition | 180 880 | - | |
| Dividends | -684 061 | -594 024 | -593 599 |
| Comprehensive income in the period | 866 700 | 436 399 | 1 490 596 |
| Equity period start | 12 360 106 | 11 464 191 | 11 464 191 |
| All figures in NOK 1.000 | 30.09.2015 | 30.09.2014 | 31.12.2014 |
| (restated) |
| (restated) | (restated) | ||||
|---|---|---|---|---|---|
| All figures in NOK 1.000 | Q3 2015 | Q3 2014 | YTD Q3 2015 | YTD Q3 2014 | 2014 |
| Cash flow from operating activities | |||||
| Profit before income taxes | 331 209 | 14 212 | 631 075 | 461 450 | 1 346 472 |
| Fair value adjustment of biological assets | -76 002 | 253 669 | 517 376 | 996 863 | 379 758 |
| Taxes paid in the period | -21 144 | -17 747 | -400 366 | -394 736 | -438 602 |
| Depreciation and amortisation | 193 721 | 158 850 | 538 768 | 460 391 | 630 307 |
| Impairments | -2 087 | -678 | -6 265 | -4 421 | 30 114 |
| Associated companies - net | -68 773 | -55 639 | -170 441 | -131 128 | -217 381 |
| Interest expense | 64 860 | 56 803 | 195 438 | 166 021 | 244 673 |
| Interest income | -7 552 | -9 733 | -25 660 | -30 387 | -47 599 |
| Change in inventories | -242 792 | -255 379 | -339 053 | -222 940 | -316 082 |
| Change in receivables | -56 160 | 58 630 | 75 574 | 333 422 | 63 834 |
| Change in payables | 184 872 | 109 645 | 73 960 | -96 646 | 10 168 |
| Other operating cash flow incl currency exchange | 111 939 | -222 459 | 40 925 | -254 720 | 109 076 |
| Net cash flow from operating activities | 412 091 | 90 174 | 1 131 331 | 1 283 169 | 1 794 738 |
| Cash flow from investing activities | |||||
| Purchase of intangible and fixed assets | -231 122 | -242 674 | -639 909 | -642 801 | -994 489 |
| Purchase of shares and equity investments | - | 195 | -129 343 | -1 746 | -64 418 |
| Proceeds from sale of fixed assets/equity investments | 44 101 | 4 877 | 49 039 | 1 129 554 | 1 191 035 |
| Cash inflow from business combinations | 4 605 | 133 557 | 12 337 | 133 557 | 133 656 |
| Dividend received | 174 000 | - | 174 000 | 17 499 | 36 250 |
| Interest income | 7 552 | 9 733 | 25 660 | 30 387 | 47 599 |
| Other investing activities - net | -889 | -1 395 | 13 780 | -12 987 | 24 970 |
| Net cash flow from investing activities | -1 753 | -95 707 | -494 436 | 653 463 | 374 603 |
| Cash flow from financing activities | |||||
| Proceeds from new long term debt | 133 861 | 608 471 | 983 299 | 752 920 | 881 174 |
| Repayment of long term debt | -178 304 | -136 841 | -605 960 | -1 200 714 | -1 394 642 |
| Change in short term debt | -109 402 | -35 840 | 72 431 | -191 603 | -106 721 |
| Interest paid | -64 860 | -55 544 | -195 514 | -157 359 | -238 067 |
| Dividends paid | - | - | -684 061 | -593 679 | -592 222 |
| Other finance cash flow - net | - | -1 082 | -1 082 | -1 082 | |
| Net cash flow from financing activities | -218 705 | 379 164 | -429 805 | -1 391 517 | -1 451 560 |
| Net change in cash and cash equivalents | 191 633 | 373 631 | 207 090 | 545 115 | 717 781 |
| Cash, and cash equivalents at start of period | 2 218 187 | 1 617 792 | 2 198 148 | 1 443 314 | 1 443 314 |
| Exchange gains/losses (-) | 10 260 | 1 035 | 14 842 | 4 029 | 37 053 |
| Cash and cash equivalents at period end | 2 420 080 | 1 992 458 | 2 420 080 | 1 992 458 | 2 198 148 |
This interim report has been prepared in accordance with International Financial Reporting Standards (IFRS) and the related standard for interim financial reporting (IAS 34). The interim financial statements, including historical comparative amounts, are based on current IFRS standards and interpretations. Changes in the standards and interpretations may result in changes to the result. The interim report has been prepared in accordance with the same policies applied to the most recent annual report, but does not contain all the information and notes required for an annual report. This report must therefore be read in the context of the company's most recent annual report (2014).
There were related party transactions in Q3 2015. Related party transactions take place on market terms, and the relevant types of transactions are described in more detail in the Annual Report 2014.
The Group recognises and measures biological assets (fish in sea) at fair value. When estimating fair value, the price is adjusted for quality differences (superior, ordinary and process) and logistics costs. The volume is adjusted for gutting loss. Fair value of fish in sea with an average weight below 4 kg is adjusted based on the stage reached in the growth cycle. The value is not adjusted to a lower amount than historical cost, unless a loss is expected on future sales.
The fair value adjustment for biomass recognised in the income statement includes change in unrealised gain/loss on financial sales and purchase contracts (derivatives) with Fish Pool, an international regulated marketplace for buying and selling financial salmon contracts. Fish Pool contracts are treated as financial instruments on the balance sheet, where unrealised gain is recognised as other current receivables and unrealised loss as other current debt.
| Carrying amount of biological assets | 30.09.2015 | 30.09.2014 | 2014 | ||
|---|---|---|---|---|---|
| Fish in sea at historic cost | 2 995 727 | 2 658 168 | 2 694 863 | ||
| FV adjustment fish in sea | 285 028 | 206 875 | 784 546 | ||
| Fair value fish in sea | 3 280 755 | 2 865 043 | 3 479 409 | ||
| Fry, brood and smolt | 174 778 | 154 261 | 202 584 | ||
| Carrying amount of biological assets | 3 455 533 | 3 019 304 | 3 681 993 | ||
| Total biological assets at historic cost | 3 170 505 | 2 812 429 | 2 897 447 | ||
| FV adjustment on biological assets | 285 028 | 206 875 | 784 546 | ||
| Carrying amount of biological assets | 3 455 533 | 3 019 304 | 3 681 993 | ||
| Fair value adjustment | Q3 2015 | Q3 2014 | YTD 2015 | YTD 2014 | 2014 |
| Change IFRS adj. biolocigal assets | 62 437 | -220 952 | -499 518 | -903 627 | -325 957 |
| Change IFRS adj. derivatives | 403 | -932 | -1 115 | -2 599 | -1 457 |
| FV adj. biological assets | 62 840 | -221 884 | -500 633 | -906 226 | -327 414 |
| Volume of fish in sea (LWT) | Q3 2015 | Q3 2014 | YTD 2015 | YTD 2014 | 2014 |
| Volume at beginning of period | 90 661 | 88 048 | 107 505 | 103 107 | 103 107 |
| Business combinations | 0 | 2 574 | 0 | 2 574 | 2 574 |
| Growht during the period | 63 456 | 66 576 | 137 772 | 141 536 | 193 666 |
| Harvested volume during the period | -49 277 | -50 351 | -140 437 | -140 370 | -191 842 |
| Volume at end of period | 104 840 | 106 847 | 104 840 | 106 847 | 107 505 |
| Fish > 4kg | 21 732 | 29 056 | 21 732 | 29 056 | 37 871 |
The figures for harvested volume and growth in the table above have been estimated on the basis of gutted weight (GWT) and converted to live weight (LWT). The gutting loss ratios for salmon and trout applied in this conversion are 17% and 20% respectively.
| Carrying amount of biological assets | YTD Q3 2015 | YTD Q3 2014 | 2014 | ||
|---|---|---|---|---|---|
| Fish in sea at historic cost | 193 829 | 184 640 | 177 463 | ||
| FV adjustment fish in sea | 6 380 | -15 170 | 23 123 | ||
| Fair value fish in sea | - | - | 200 209 | 169 470 | 200 586 |
| Fry, brood and smolt | - | - | - | ||
| Carrying amount of biological assets | - | - | 200 209 | 169 470 | 200 586 |
| Fair value adjustment | Q3 2015 | Q3 2014 | YTD Q3 2015 | YTD Q3 2014 | 2014 |
| Change IFRS adj. biolocigal assets | 13 162 | -31 785 | -16 743 | -90 637 | -52 344 |
| Change IFRS adj. derivatives | - | - | - | - | - |
| FV adj. biological assets | 13 162 | -31 785 | -16 743 | -90 637 | -52 344 |
| Volume of fish in sea (LWT) | Q3 2015 | Q3 2014 | YTD Q3 2015 | YTD Q3 2014 | 2014 |
| Volume at beginning of period | 3 822 | 4 901 | 5 893 | 5 915 | 5 915 |
| Growht during the period | 2 808 | 2 965 | 6 044 | 6 789 | 8 847 |
| Harvested volume during the period | -833 | -1 577 | -6 140 | -6 415 | -8 869 |
| Volume at end of period | 5 797 | 6 289 | 5 797 | 6 289 | 5 893 |
| Fish > 4kg | - | 1 954 | - | 1 954 | 1 489 |
The figures for harvested volume and growth in the table above have been estimated on the basis of gutted weight (GWT) and converted to live weight (LWT). The gutting loss ratios for salmon and trout applied in this conversion are 17% and 20% respectively.
| Pelagia AS * | ||||||||
|---|---|---|---|---|---|---|---|---|
| Lerøy | Austral | Foodcorp | Br. | (50% of | Total Group | |||
| All figures in NOK 1.000 |
Seafood Group ASA |
Group S.A.A |
Chile S.A |
Birkeland AS |
Other/ eliminations |
Total Group | figures and volumes) |
incl. Pelagia AS (50%) |
| Q3 2015 | ||||||||
| Operating revenue | 3 291 271 | 323 351 | 139 969 | 85 380 | -48 680 | 3 791 291 | 710 351 | 4 501 642 |
| EBITDA | 365 171 | 50 052 | 11 153 | 20 143 | 142 | 446 661 | 102 647 | 549 308 |
| EBITDA % | 11 % | 15 % | 8 % | 24 % | 12 % | 14 % | 12 % | |
| EBIT ex. Impairment | 253 237 | 6 713 | -5 165 | 3 306 | -5 151 | 252 940 | 83 175 | 336 115 |
| EBIT | 253 237 | 8 800 | -5 165 | 3 306 | -5 151 | 255 027 | 83 175 | 338 202 |
| Volumes sold: | ||||||||
| Salmon (gwt tonnes) | 40 682 | 700 | 41 382 | 41 382 | ||||
| Fishmeal/oil/FPC (tonnes) | 21 084 | 4 110 | 25 194 | 31 711 | 56 905 | |||
| Frozen fish (tonnes) | - | 3 553 | 3 553 | 31 150 | 34 703 | |||
| Canning (cases) | 58 356 | 7 597 | 65 953 | 65 953 | ||||
| Q3 2014 (restated) | ||||||||
| Operating revenue | 3 036 495 | 244 652 | 101 193 | 71 234 | -62 232 | 3 391 342 | 614 551 | 4 005 893 |
| EBITDA | 397 764 | 24 244 | -4 698 | 18 093 | 4 177 | 439 580 | 76 682 | 516 262 |
| EBITDA % | 13 % | 10 % | -5 % | 25 % | 13 % | 12 % | 13 % | |
| EBIT ex. Impairment | 302 758 | -8 741 | -17 802 | 4 704 | -191 | 280 728 | 56 681 | 337 409 |
| EBIT | 302 758 | -6 855 | -19 010 | 4 704 | -191 | 281 406 | 56 681 | 338 087 |
| Volumes sold: | ||||||||
| Salmon (gwt tonnes) | 41 499 | 1 326 | 42 825 | 42 825 | ||||
| Fishmeal/oil/FPC (tonnes) | 19 214 | 4 635 | 23 849 | 23 176 | 47 025 | |||
| Frozen fish (tonnes) | 739 | 3 690 | 4 429 | 37 940 | 42 369 | |||
| Canning (cases) | 126 141 | 17 972 | 144 113 | - | 144 113 | |||
| YTD Q3 2015 | ||||||||
| Operating revenue | 9 921 458 | 1 020 489 | 347 387 | 338 305 | -182 718 | 11 444 921 | 1 993 048 | 13 437 969 |
| EBITDA | 1 336 261 | 298 897 | 49 947 | 56 405 | -157 | 1 741 353 | 248 054 | 1 989 407 |
| EBITDA % | 13 % | 29 % | 14 % | 17 % | 15 % | 12 % | 15 % | |
| EBIT ex. Impairment | 1 027 193 | 177 495 | 2 638 | 10 700 | -15 441 | 1 202 585 | 188 058 | 1 390 643 |
| EBIT | 1 027 193 | 183 760 | 2 638 | 10 700 | -15 441 | 1 208 850 | 188 058 | 1 396 908 |
| Volumes sold: | ||||||||
| Salmon (gwt tonnes) | 116 000 | 5 158 | 121 158 | 121 158 | ||||
| Fishmeal/oil/FPC (tonnes) | 60 338 | 6 603 | 66 941 | 75 228 | 142 169 | |||
| Frozen fish/fresh (tonnes) | 26 | 9 858 | 9 884 | 86 775 | 96 659 | |||
| Canning (cases) | 297 753 | 18 019 | 315 772 | 315 772 |
| Pelagia AS * | ||||||||
|---|---|---|---|---|---|---|---|---|
| Lerøy | Austral | Foodcorp | Br. | (50% of | Total Group | |||
| All figures in | Seafood | Group | Chile | Birkeland | Other/ | figures and | incl. Pelagia | |
| NOK 1.000 | Group ASA | S.A.A | S.A | AS | eliminations | Total Group | volumes) | AS (50%) |
| YTD Q3 2014 (restated) | ||||||||
| Operating revenue | 9 393 161 | 842 226 | 372 271 | 276 443 | -244 613 | 10 639 488 | 1 796 458 | 12 435 946 |
| EBITDA | 1 626 292 | 163 825 | 72 542 | 69 609 | 5 906 | 1 938 174 | 156 376 | 2 094 550 |
| EBITDA % | 17 % | 19 % | 19 % | 25 % | 18 % | 9 % | 17 % | |
| EBIT ex. Impairment | 1 353 433 | 65 827 | 31 601 | 31 272 | -6 766 | 1 475 367 | 95 662 | 1 571 029 |
| EBIT | 1 353 433 | 71 456 | 32 809 | 31 272 | -6 766 | 1 482 204 | 95 662 | 1 577 866 |
| Volumes sold: | ||||||||
| Salmon (gwt tonnes) | 115 779 | 5 390 | 121 169 | 121 169 | ||||
| Fishmeal/oil/FPC (tonnes) | 67 362 | 18 562 | 85 924 | 66 136 | 152 060 | |||
| Frozen fish/fresh (tonnes) | 1 489 | 13 915 | 15 404 | 111 070 | 126 474 | |||
| Canning (cases) | 475 621 | 50 807 | 526 428 | - | 526 428 | |||
| 2014 | ||||||||
| Operating revenue | 12 696 874 | 1 067 299 | 500 696 | 429 190 | -349 882 | 14 344 177 | 2 822 806 | 17 166 983 |
| EBITDA | 2 160 138 | 180 137 | 79 483 | 91 523 | 4 907 | 2 516 188 | 294 634 | 2 810 822 |
| EBITDA % | 17 % | 17 % | 16 % | 21 % | 18 % | 10 % | 16 % | |
| EBIT ex. Impairment | 1 790 625 | 42 045 | 26 341 | 39 117 | -12 247 | 1 885 881 | 209 942 | 2 095 823 |
| EBIT | 1 788 676 | 38 977 | 1 243 | 39 117 | -12 247 | 1 855 766 | 209 942 | 2 065 708 |
| Volumes sold: | ||||||||
| Salmon (gwt tonnes) | 158 258 | 158 258 | 158 258 | |||||
| Fishmeal/oil/FPC (tonnes) | 79 075 | 21 994 | 7 520 | 108 589 | 87 432 | 196 021 | ||
| Frozen fish/fresh (tonnes) | 2 626 | 16 823 | 19 449 | 194 808 | 214 257 | |||
| Canning (cases) | 557 046 | 60 021 | 617 067 | - | 617 067 |
| (restated) | (restated) | |||||
|---|---|---|---|---|---|---|
| Q3 2015 | Q3 2014 | YTD Q3 2015 | YTD Q3 2014 | 2014 | ||
| Norskott Havbruk AS | 50,0 % | 5 546 | 10 421 | 27 915 | 65 031 | 95 540 |
| Pelagia AS | 50,0 % | 61 838 | 42 445 | 131 471 | 67 588 | 124 744 |
| Villa Organic AS | 47,8 % | - | - | - | -5 418 | -5 418 |
| Others | 1 392 | 2 773 | 11 056 | 3 927 | 2 515 | |
| Total income from ass.companies | 68 776 | 55 639 | 170 442 | 131 128 | 217 381 | |
| Total investment | 1 637 573 | 1 375 252 | 1 563 187 |
Business combinations have taken place in Lerøy Seafood Group ASA (LSG) in 2015. The two farming companies in North Norway, Lerøy Aurora AS and Lerøy Finnmark AS, were merged to form one unit at the start of 2015, with Lerøy Aurora AS as the acquiring party. LSG has increased its equity interest in Alfarm Alarko Lerøy from 50% to 100% by purchasing the remaining 50% of the shares. In connection with the acquisition, the company changed its name to Lerøy Tyrkia A.S., and the former associate is now a subsidiary. Moreover, LSG has acquired 100% of the shares in the Norwegian company Senja Akvakultursenter AS via Lerøy Aurora AS. The company owns a large plot of land regulated for aquaculture and is currently a major producer of lumpfish. At the start of 2015, LSG acquired 91% of the shares in the Norwegian company Preline Fishfarming System AS. For more detailed information, please refer to LSG's financial report for the third quarter of 2015, available at www.leroy.no.
| Investor | Number of shares | % of top 20 | % of total |
|---|---|---|---|
| LACO A/S | 112 605 876 | 75,60% | 55,55% |
| PARETO AKSJE NORGE | 6 132 097 | 4,12% | 3,02% |
| STATE STREET BANK & TRUST CO, | 5 219 851 | 3,50% | 2,57% |
| STATE STREET BANK AND TRUST CO, | 3 474 845 | 2,33% | 1,71% |
| FOLKETRYGDFONDET | 1 938 691 | 1,30% | 0,96% |
| MITSUI AND CO, LTD | 1 782 236 | 1,20% | 0,88% |
| JP MORGAN CHASE BANK NA | 1 765 000 | 1,18% | 0,87% |
| PACTUM AS | 1 725 000 | 1,16% | 0,85% |
| BR,BIRKELAND AS | 1 722 223 | 1,16% | 0,85% |
| DANSKE INVEST NORSKE INSTIT, II, | 1 447 882 | 0,97% | 0,71% |
| JP MORGAN BANK LUXEMBOURG S,A | 1 372 600 | 0,92% | 0,68% |
| THE BANK OF NEW YORK MELLON | 1 233 197 | 0,83% | 0,61% |
| OM HOLDING AS | 1 210 000 | 0,81% | 0,60% |
| CITIBANK N,A, | 1 187 524 | 0,80% | 0,59% |
| MP PENSJON PK | 1 182 000 | 0,79% | 0,58% |
| THE NORTHERN TRUST CO, | 1 178 124 | 0,79% | 0,58% |
| SKANDINAVISKA ENSKILDA BANKEN AB | 1 007 594 | 0,68% | 0,50% |
| FORSVARETS PERSONELLSERVICE | 990 246 | 0,66% | 0,49% |
| PARETO AS | 921 000 | 0,62% | 0,45% |
| STATE STREET BANK AND TRUST CO | 861 681 | 0,58% | 0,43% |
| Total number owned by top 20 | 148 957 667 | 100 % | 73,48% |
| Total number of shares | 202 717 374 | 100 % |
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