Grieg Seafood — Earnings Release 2020

Nov 17, 2020

Grieg Seafood releases third quarter 2020 results and presents plan for enhanced value creation

Grieg Seafood releases third quarter 2020 results and presents plan for enhanced value creation

Today, Grieg Seafood ASA releases its report for the third quarter 2020. At the

same time, the company presents an update on its ambitions, strategy and

priorities in a capital markets update.

Third quarter highlights

* Harvest volume of 21 201 tonnes (21 028 tonnes in Q3 2019)

* Negative EBIT before fair value adjustment of NOK 192 million (+143 million)

* Negative EBIT/kg of NOK 9.0 (+6.8)

* Disrupted markets with low spot prices had a negative impact by NOK 92

million on earnings in the quarter compared to corresponding quarter in 2019

* Good performance in Rogaland and Finnmark, total EBIT/kg NOK 9.9 (11.2)

* Shetland profitability negatively impacted by NOK 150 million from Skye and

Grieg Seafood decided to cease its operations on Isle of Skye

Commenting on the company's performance in Q3, CEO Andreas Kvame, said:

"The third quarter was challenging for Grieg Seafood. Effects of the Covid-19

impacted price achievements negatively in all markets and we experienced

operational challenges out of the ordinary on Isle of Skye. On the other hand,

our Norwegian regions delivered good results in the quarter. Progress is made at

our recently acquired greenfield project in Newfoundland, and healthy fish are

growing in our new hatchery. However, to lower risk in the initial phase of the

project, we have decided to defer the construction of the first post-smolt unit

to 2023, without causing delay to our target of harvesting 15 000 tonnes in

2025."

Capital markets update: Value creation through improvement and growth

"In 2020, we have not been able to deliver on our ambitions. Grieg Seafood has a

clear goal of creating value and we are taking decisive action and implementing

measures to improve our performance the coming years. We will reduce cost per

unit in all regions supported by cost effective and sustainable farming methods

and profitably grow our salmon production by around 45% towards 2025", commented

CEO Andreas Kvame.

The highlights from the presentation

* Focus on high potential regions of Norway and Canada. Initiative to divest

Shetland assets

* Targeting average farming cost below NOK 40/kg in Norway and below CAD 7/kg

in British Columbia, which is 10-15% below current levels

* Introduce cost and efficiency measures in the areas of smolt infrastructure

development, improve fish health and welfare, focus on preventative farming

practices and execute value chain repositioning

* Targeting production of 100 000 tonnes in 2022 and 130 000 tonnes in 2025.

Adjusting for the initiated divestment of the Shetland assets, this

corresponds with the previously announced ambition to produce 150 000 tonnes

in 2025. The production target of 90 000 tonnes in 2020 is maintained

* Total investments next five years to reach 130 000 tonnes in 2025 is

estimated to be NOK 2,6 billion (excluding biomass and maintenance)

* Grieg Seafood shall maintain sufficient financial capacity to execute the

growth strategy. The company presents a solid projected cash generation in

the medium- to high-price scenarios and even in a low-price scenario of NOK

50 per kg the next five years, the growth investments are projected to be

funded

* In the short term, the company is pursuing three potential sources of

capital

* Extending a current bridge loan to after a divestment of Shetland assets

* Continue a dialog with GIEK on financing of the Newfoundland project

* Following the successful issue of a Green bond in June, Grieg Seafood

intends to actively utilize the bond market

* Grieg Seafood reiterates its goal to provide a competitive dividend pay-out

over time

Presentation

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

capital markets update by webcast today at 8:00 a.m. CET.

The presentation can be accessed at www.griegseafood.com, or with the following

link: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20201117_3

The presentations and the subsequent Q&A will be held in Norwegian. An English

transcript of the presentations will be made available at www.griegseafood.com

(http://www.griegseafood.com).

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. Our farms are in

Finnmark and Rogaland in Norway, British Columbia and Newfoundland in Canada,

and Shetland in the UK. Our headquarter is located in Bergen, Norway. Grieg

Seafood was listed at the Oslo Stock Exchange in June 2007. More than 900 people

are employed by the company globally.

Sustainable farming practices are the foundation of Grieg Seafood's operations.

The lowest possible environmental impact and the best possible fish welfare

drive economic profitability. Towards 2025, we aim for global growth, cost

leadership in each region and to evolve from a pure salmon supplier to an

innovation partner for selected customers.

To learn more, please visit www.griegseafood.com.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.