Grieg Seafood — Earnings Release 2020

Feb 11, 2021

Grieg Seafood ASA: Q4 2020 results - Disrupted markets with low spot prices impacted earnings

Grieg Seafood ASA: Q4 2020 results - Disrupted markets with low spot prices impacted earnings

Fourth quarter highlights

* Harvest volume of 20 271 tonnes in fourth quarter and 71 142 tonnes for the

full year, below guidance of 75 000 tonnes (ex Shetland) due to ISA harvest

capacity challenges in Finnmark

* Good biological performance in Rogaland and BC

* Finnmark impacted by high cost related to continued harvest of ISA sites

* Negative EBIT before fair value adjustment of NOK 17 million

* Negative EBIT/kg NOK 0.8

* Disrupted markets with low spot prices impacted earnings negatively by NOK

107 million vs Q4 2019

* Process to divest Shetland assets initiated. Shetland classified as held for

sale and not included in EBIT

* Additional issue of NOK 500 million on the Green Bond

* In historic move, soy vendors to the salmon industry became the first

Brazilian soy suppliers to end trade of deforestation linked soy

* Expect harvest of 80 000 tonnes (ex Shetland) in 2021

Subsequent event

* Fully integrated sales and marketing organization operational in January

2021

* Invested in Årdal Aqua in January 2021, a joint venture for post-smolt and

land-based salmon farming

Covid-19

The Covid-19 pandemic has disrupted the salmon market with a significant shift

in demand and lower prices in core markets. The priorities for Grieg Seafood are

protecting our people, the local communities where we operate, our partners and

business operations, and to secure liquidity and financial solidity. Despite the

challenging circumstances, demand for Atlantic salmon remains strong and Grieg

Seafood has been able to maintain efficient operations throughout the quarter.

Financial results

The Group harvested 20 271 tonnes in Q4 2020, down 12% compared to 23 010 tonnes

in Q4 2019.

The average spot salmon price (NQSALMON, weekly average less distributor margin)

for Q4 2020 was NOK 43.2 per kg, down by NOK 13.4 per kg compared to Q4 2019,

and down by NOK 3.9 per kg compared to Q3 2020.

Sales revenues in Q4 2020 from continuing operations amounted to

NOK 1 163 million, a decrease of 20% compared to Q4 2019. The decrease is mainly

due to the lower spot prices in Norway, resulting in a negative revenue

contribution on EBIT of NOK 107 million when comparing average realized prices

in the quarter to Q4 2019. However, the effect from BC impacted our EBIT

positively by NOK 15 million. The negative effect from lower market prices were

also somewhat offset by favourable fixed price contracts in Rogaland and

Finnmark.

Farming cost during the period (total cost related to fish harvested this

quarter) increased compared to the same quarter last year, primarily due to

biological challenges in Finnmark and to some extent by decreased survival in

Rogaland. On top of a challenging salmon market in Norway, Finnmark has been

negatively impacted by quality downgrades related ISA, and superior for the

quarter ended at 77%. BC experienced a strong recovery from the challenges with

harmful algae blooms (HAB) in prior quarters. However, farming cost in the

fourth quarter carry high costs from previous HAB incidents.

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

by NOK 17 million during the quarter, corresponding to a negative EBIT per kg of

NOK 0.8.

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

"As expected, the last quarter of 2020 was also characterized by the Covid-19

pandemic. Lockdowns in Europe, shifting demand from hotels and restaurants to

retail, impacted salmon prices significantly.

Operational results improved and stabilized during the fourth quarter, with good

biological performance in Rogaland and BC. In Finnmark, production was stable,

but results were impacted by continued harvest of fish affected by ISA during

Q3.

Overall, 2020 has been a challenging year. We did not deliver on our ambitions,

not only because of Covid-19 but also due to biological challenges in several

regions. We have taken important steps to remedy the situation. We have

strengthened our operational capabilities with a new and more farming oriented

organizational set-up, and with a potential sale of our Shetland operations, we

are narrowing our focus to Norway and Canada as strong production regions. We

have also started our journey to take a stronger market position with a new and

integrated sales and marketing organization.

As we are starting to see the light in the end of the tunnel and a post-Covid-

19 world, Grieg Seafood continue the journey of improvement, with the aim of

creating long-term value for all our stakeholders."

Strategic priorities

The Group aim to provide shareholders with a competitive return on invested

capital through payment of dividends and share price increases. The Company´s

long-term dividend strategy states that the average dividend should correspond

to 30%-40% of profit after tax, before fair value adjustment of biological

assets. Dividends are evaluated twice a year. Due to the increased volatility

and uncertainty caused by the Covid-19 situation, combined with an extensive

investment plan, the Board has decided to postpone the ordinary dividend for

Outlook

In the short term, operational efficiency and biosecurity are the top priorities

in Grieg Seafood.

With the uncertainties of the ongoing pandemic and the reinforcement of

restrictions, the short-term market outlook remains uncertain with forward

prices on Fishpool around NOK 49 per kg for Q1 2021 and NOK 52 per kg for the

full year 2021. The longer-term view on the market is looking better, where

Fishpool salmon prices have been traded around NOK 57 per kg for the full year

of 2022.

The Group targets a contract share of 20-50%. Estimated contract share for Q1

2021 is 45% for Norway, with current full year 2021 estimate of 28%.

In 2019, a total of 25.2 million smolt with an average weight of 190 grams was

stocked to sea, with the aim of harvesting 100 000 tonnes in 2020. However, in a

pandemic with low market prices, combined with reduced growth and harvest

adjustments in Finnmark, we postponed some harvesting to 2021, reducing our

target harvest volume to 90 000 tonnes in 2020 or 75 000 tonnes ex. Shetland. We

ended the year with a harvest of 71 142 tonnes ex. Shetland, or 86 850 tonnes

incl. Shetland.

In 2020, we have stocked 22 million smolt to sea, with an average weight of 230

grams, with a harvest target of 80 000 tonnes in 2021 (ex. Shetland).

In the first quarter of 2021, expected harvest volume is 10 700 tonnes, with the

following area distribution:

* Rogaland:  4 300 tonnes

* Finnmark:  6 300 tonnes

* BC:              600 tonnes

Grieg Seafood maintains the long-term harvest volume target of 130 000 by 2025.

Results presentation

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

webcast today, Thursday 11 February at 08:00 CET.

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

link: https://channel.royalcast.com/landingpage/hegnarmedia/20210211_2/

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

transcript of the presentations will be made available at

https://investor.griegseafood.com/reports-&-presentations.

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, targeting

130 000 tonnes of harvest (GWT) in 2025. 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 ASA was listed at

the Oslo Stock Exchange in June 2007. More than 900 people work in the Company

throughout our regions.

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

The lowest possible environmental impact and the best possible fish welfare is

both and ethical responsibility and drive economic profitability. Towards 2025,

we aim for global growth, cost improvements 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.