Grieg Seafood — Earnings Release 2018

Feb 13, 2019

Grieg Seafood ASA: Q4 2018 results - ending 2018 with record high harvest volume

Grieg Seafood ASA: Q4 2018 results - ending 2018 with record high harvest volume

Highlights

* EBIT NOK 351 million (NOK 151 million), EBIT per kg NOK 14.81; up 84% from

to Q4 2017

* Earnings driven by high prices and cost reduction per kg

* Harvest volume of 24 000 tonnes (+27%) driven by strong biological

performance in Norway

* Good production with high average harvest weight in BC, continued high cost

due to challenges in previous quarters

* High cost in Shetland due to continued biological challenges

* Awarded A- by the Carbon Disclosure Project on actions related to Climate

Change

* Expected harvest volume of 82 000 tonnes (+10%) in 2019

Financial results

The Grieg Seafood Group harvested 23 682 tonnes GWT in Q4 2018, compared to

18 667 tonnes in Q4 2017, compared to 18 667 tonnes in Q4 2017.

The average realized price for Grieg Seafood was up by NOK 5.55 per kg compared

to Q4 2017.

Grieg Seafood's total operating income in Q4 2018 amounted to NOK 2 128 million,

an increase of 23% compared to the same period last year .

The farming cost (total cost related to fish harvested this quarter) increased

by NOK 0.43 per kg compared to the same quarter last year. This is mainly

related to high cost of harvested fish in BC and on Shetland that was affected

by harmful algal bloom (HAB) and gill-related diseases.

The Group's EBIT before fair value adjustment of biological assets was NOK 351

million during the quarter, compared to NOK 151 million in the same quarter of

2017. EBIT per kg amounted to NOK 14.81 for the period, up from NOK 8.07 in Q4

In 2018 the Grieg Seafood Group's operating income totaled NOK 7 552 million,

compared to NOK

7 038 million in 2017. Higher prices and volumes contributed positively. Total

harvest volume for the year was 74 623 tonnes GWT, up from 62 598 tonnes GWT in

EBIT per kg was NOK 14.72, compared to NOK 14.45 in 2017. EBIT per kg was

positively affected by the large harvest volume and high spot prices, however

the cost related to pancreas disease (PD), HAB and gill diseases during the year

had a negative impact, both in terms of high cost and price achievement. Total

farming cost per kg for the Group was NOK 43.1, NOK 0.7 above our targeted cost

of NOK 42.4 for the year.

Commenting on the Group's performance, CEO Andreas Kvame, said:

"Q4 2018 ended a strong year for Grieg Seafood in which we reached our last

guiding harvest volume of 75 000 tonnes - an increase of 20% compared to 2017 -

and revenues of more than NOK 7.5 billion. This was achieved by maintaining a

strict focus on sustainability and driving forward improvements to our farming

operations.

Throughout the year we introduced several initiatives, including advanced

sensor- and monitoring systems across our four regions. In September we opened a

new operations center in Rogaland, supporting our digitalization strategy

utilizing big data analytics to improve overall operational performance.

We are proud of receiving the second highest grade by the Carbon Disclosure

Project, which scores companies based on their work to cut carbon emissions.

With improved operations and by maintaining a strict focus on sustainable

farming and on securing fish welfare, we are well prepared to continue executing

on our growth strategy, targeting 100 000 tonnes in 2020 with cost at or below

industry average"

Strategic priorities

Grieg Seafood's objective is to ensure sustainable growth in the years ahead by

combining skilled and motivated people, new technology and to increasingly farm

salmon on nature's terms. The goal is to increase sustainable production to

reach an annual harvest volume of 100 000 tonnes in 2020. We are also aiming for

production cost at or below weighted industry average, targeting NOK 37.90 per

kg by 2020. In Norway, the target is NOK 36.00 per kg by 2020.

To ensure progress towards our goal for sustainable growth, we have initiated

the GSF 2020 improvement program, with specific targets and initiatives for each

region. The program contains four strategic priorities;

1) digitalization

2) post-smolt strategy

3) biosecurity and fish welfare

4) expansion opportunities

Through its digitalization strategy "GSF Precision Farming," Grieg Seafood

intends to take a leading role in utilizing new technology, big data and

artificial intelligence to improve operational efficiency through reduced

environmental impact, increased fish welfare and improved growth.

With a strict focus on biosecurity and fish welfare, Grieg Seafood aims to

achieve strong biological performance through the implementation of a broad

range of technological and operational initiatives, including large smolt, GSF

Precision Farming and other preventive operational measures aimed at combating

sea lice and algae. The group targets an average survival rate in seawater above

93%. In 2018, average survival rate was 91%.

Outlook

The global supply of Atlantic Salmon for 2019 is expected to increase while

demand growth is expected to remain stronger than supply growth, contributing to

continued good prices going forward.

Grieg Seafood expects to harvest approximately 82 000 tonnes in 2019, an

increase of 10% from 2018. The expected harvest volume for Q1 2019 is 13 200

tonnes.

Results presentation

CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results later

today at 09:00 CET at Hotel Continental, Stortingsgaten 24/26, Oslo.

The presentation and subsequent Q&A will be held in Norwegian and can be

followed live via webcast at www.griegseafood.com or at the following link:

http://webtv.hegnar.no/presentation.php?webcastId=97603010

An English transcript of the presentation will be made available at

www.griegseafood.com within a few days after the presentation.

For further enquiries, please contact:

Andreas Kvame, CEO

Cell phone: +47 907 71 441

Atle Harald Sandtorv, CFO

Cell phone +47 908 45 252

About Grieg Seafood

Grieg Seafood ASA is one of the world's leading salmon farmers, specializing in

Atlantic salmon. The Group has an annual production target of 100 000 tonnes

gutted weight in 2020.

Our farming facilities are in Finnmark and Rogaland in Norway, British Columbia

in Canada and Shetland in the UK. Approximately 780 people are employed by the

Group. Grieg Seafood ASA was listed at the Oslo Stock Exchange in June 2007. Our

headquarters are situated in Bergen, Norway. The business development of Grieg

Seafood ASA focuses on profitable growth, sustainable use of resources and being

the preferred supplier to selected customers.

To learn more, visit www.griegseafood.com

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.