Grieg Seafood — Earnings Release 2017

Aug 24, 2017

Grieg Seafood ASA: Q2 2017 - Solid performance in Q2

Grieg Seafood ASA: Q2 2017 - Solid performance in Q2

Highlights - Second Quarter 2017

* Profit growth driven by high prices.

* Sound financial position.

* Stable production in Norway and BC.

* Sea lice and algae present challenges in Shetland.

* New location allocated in Finnmark.

* Two locations receive ASC certification

* Ownership interests secured in large smolt production in Finnmark and

Rogaland.

Second Quarter Results 2017

The harvest volume for the Grieg Seafood Group in Q2 2017 was 18 503 tons, up

from 16 263 tons in the corresponding period last year, reflecting an   increase

of 14 %.

Combined with higher prices this resulted in total operating income of NOK

2 030m, an increase of 21 % compared to the same period in 2016.

EBIT for the Group before fair value adjustment of biomass was NOK 392m in Q2

2017, compared to NOK 312m in Q2 2016.EBIT per kilo in the period was NOK

21.20, up from NOK 19.20 per kilo in Q2 2016.

The average spot price rose by NOK 3.60 per kilo, while GSF's realized prices

showed an increase of NOK 7.70 per kilo. The difference was largely due to

higher contract prices. Costs was NOK 5.70 per kilo higher compared to Q2 2016.

The challenging biological situation in Shetland has been a major contributor to

the increase in costs.

Strategic priorities

A stated goal is to reduce GSF's cost level to the industry average, or lower.

The company will also be aiming to increase production by 10 % annually in the

period through 2020.

GSF has an ongoing focus on improving operating efficiency. This involves both

increasing production per plant and per licence, and reducing costs per kilo.

One of the key steps being taken to increase production is to set out bigger

smolt. This shortens the production time in the sea and reduces the biological

risk.  An increase in the number of smolt is also decisive to ensure future

growth and lower costs per kilo.

The company is planning to set out 26 million smolt in 2017, which is an

increase of 28 % compared to 2016. After the first half-year GSF are on track on

the plan. So far 10 million smolt have been set out.

In order to achieve growth by increasing the yield per licence, greater

locational flexibility is a key factor. This is therefore an ongoing focus of

attention in our contact with local authorities.

Market development

There was some increase in salmon prices in Q2 2017, the only exception being

the North American market where prices declined through the period.

Fixed price contracts for Norway accounted for 18 % of sales in Q2 2017. This

share is expected to be 32 % in Q3 2017. For 2017 as a whole, it is estimated

that fixed price contracts will account for 25 % of the total. Work is also in

hand pertaining to contracts for 2018.

Outlook

The supply of salmon is expected to increase in Q3 2017, which may put prices

under pressure. However, in the longer term, there is no indication of changes

in the strong market trend that has characterised the last few years.

The harvest volume for Q3 2017 is expected to be 16 500 tons. The harvest volume

for 2017 as a whole is expected to be 67 000 tons, which is 3 000 tons less than

previously indicated. This must be considered in light of the biological

situation in Shetland.

Please find enclosed the company's Q2 2017 report and presentation.

For further information, please contact:

- CEO Andreas Kvame (cell phone: +47 907 71 441)

- CFO Atle Harald Sandtorv (cell phone: +47 908 45 252)

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.