Grieg Seafood — Earnings Release 2023

Nov 14, 2023

Grieg Seafood ASA: Q3 2023 results

Grieg Seafood ASA: Q3 2023 results

Highlights

* Biological on-off events have impacted production and results. Action taken

to reduce biological risks

* Low harvest volume in the quarter to focus on rebuilding biomass

* Milestone reached in Newfoundland, where we in October conducted our very

first harvest

* Expansion of post-smolt in Finnmark to accelerate post-smolt strategy

* 78% of the harvested volume in the quarter ASC certified

* Expect harvest of 25,800 tonnes in Q4 2023. Total volume of 76,000 tonnes in

2023, increasing to 85,000 tonnes in 2024

Financial results

Operational EBIT for Grieg Seafood was NOK -86 million in the third quarter of

2023,

compared to NOK 145 million in the corresponding period last year. Harvest

volume was 12,245 tonnes in the period (22,923), which gives an operational EBIT

per kg of NOK -7.0 (6.3).

Commenting on the quarter, Andreas Kvame, CEO of Grieg Seafood ASA said:

"During the third quarter, Grieg Seafood's main priority was to let the fish

grow and build biomass. As a result, harvest volumes were low, causing increased

costs per kilo. The operational performance was impacted by a mixture of

different biological challenges, including Spiro in Finnmark, harvesting at low

weights due to previous ISA outbreaks in Rogaland and seasonal biological issues

in British Columbia. Unfortunately, these events reduced our price achievement

and earnings.

I am not satisfied with the results. We are turning every stone in the regions

to get back on track. Mitigating measures have been implemented, such as

vaccination programs against ISA and winter ulcers as well as a UV filter to

prevent Spiro from entering our smolt facility. Due to the long production cycle

of the salmon, it takes some time before we see the effect of the measures. I am

encouraged that the underlying biology in Rogaland is good. In Finnmark, the

generation of fish transferred to the ocean during 2023 has not been impacted by

Spiro and is performing well.

The development in Newfoundland was the high point of the quarter, with

commenced first harvest in October. Biological control has been strong, with

high survival, good fish health and welfare, good growth, good product quality

and no sea lice issues. We look forward to taking the next steps in

Newfoundland.

In addition to short-term measures to improve biology, Grieg Seafood are also

taking steps towards our ambitions of sustainable growth in the medium to long

term. We are investing NOK 1.1 billion in a 3,000 tonnes post-smolt expansion in

Finnmark, to advance biological control, fish health and welfare and

sustainability. In Canada, we see huge opportunities for sustainable salmon

farming in close proximity to the growing North American market. We aim to

realize the Canadian potential. However, developing the Canadian operations

require substantial investments at a time when the resource tax and overall

inflation require greater capital discipline. As such, we are seeking long-term

partners to invest with us, allowing us to develop our business in Canada at

pace.

While it has been a tough quarter, a lot of good work has been done to get back

in shape. I want to thank all of my hard-working colleagues for their efforts."

Harvest volume in Rogaland was 4,783 tonnes in the quarter (6,841). Farming cost

increased compared to Q2 2023 mainly due to the low harvest volume and ISA-

related harvesting. At quarter end, there were no sites with ISA. Grieg Seafood

has initiated a vaccination program against ISA for all smolt release to sea,

and completed additional measures at its smolt facilities, which is expected to

reduce risk related to ISA significantly going forward. Operational EBIT/kg

ended at NOK 0.7 for the quarter (13.4), impacted by the low harvest volume in

addition to reduced average harvest weight compared to Q3 2022 due to early

harvest. Due to the early harvest of ISA-infected fish in the quarter, the full

year 2023 harvest target for Rogaland is reduced from 27,000 to 26,000 tonnes.

In Finnmark, harvest volume was 1,354 tonnes in the quarter (8,174). We did not

plan to harvest during Q3, however we prioritized earlier harvest to maintain

fish welfare related to Spiro. Water treatment equipment have been installed and

disinfection measures have been implemented to significantly reduce future risks

of Spiro entering the freshwater facility. We have not had any new detections of

Spiro at the freshwater facility in 2023. The new generation of smolt

transferred to sea in 2023 is in good health and is performing well. Farming

cost increased from last quarter mainly due to low harvest volume at lower

weights. Operational EBIT/kg for the quarter ended at NOK -27.1 (14.0), impacted

by the low harvest volume, low superior share and low average harvest weight.

Unfortunately, earlier harvest to maintain fish welfare has also occurred in Q4.

Therefore, the full year 2023 harvest estimate is lifted from 26,000 to 27,000

tonnes.

In BC, harvest volume was 6,108 tonnes in the quarter (7,908). The seawater

performance was impacted by seasonal challenges including high sea lice pressure

necessitating treatments and events of low dissolved oxygen, however the

situation improved towards the end of the quarter. The survival rate remained

stable from last quarter, however these events impacted farming costs, resulting

in negative results for the BC operations during the quarter.

In Newfoundland, both freshwater and seawater production was good during the

quarter. High smolt quality combined with favorable biological conditions

contributed to good fish health and survival high. During the quarter,

Newfoundland completed the  smolt transfer to sea this year, which totals 2.5

million smolt with an average weight of 140 grams. The 12 month rolling survival

rate as of quarter end was 96%, with good growth at sea, and no sea lice issues.

At the end of Q3 2023, we had approximately 9 300 tonnes biomass at sea with an

average weight of 2.0 kg. The average weight of the fish transferred to sea in

2022 was 4.1 kg at the end of the quarter. We started harvesting in October,

with excellent results. Total harvest for the year is estimated to 5,000 tonnes.

Outlook

Global harvest of Atlantic salmon in 2023 is expected to be slightly reduced

compared to 2022. With expectations of no growth in global harvest in 2023,

combined with an outlook for continuing strong demand fueled by an increased

focus on healthy food and sustainably produced proteins, we currently expect

sustained strong market for the remainder of 2023.

Grieg Seafood generally targets an annual contract share of 20-50%. Estimated

contract share for the Norwegian operations in Q4 2023 is 15% and 15% for the

full year 2023.

In Q4 2023, expected harvest volume is 25,800 tonnes, distributed as follows:

* Rogaland: 2,200 tonnes

* Finnmark: 12,200 tonnes

* BC: 6,400 tonnes

* Newfoundland: 5,000 tonnes

Grieg Seafood guides for a total harvest volume of 76,000 tonnes in 2023, down

from previously guided 78,000 tonnes:

* Rogaland: 26,000 tonnes

* Finnmark: 27,000 tonnes

* BC: 18,000 tonnes

* Newfoundland: 5,000 tonnes

Results presentation

Grieg Seafood ASA releases its third quarter 2023 report today at 6:00 a.m. CET.

At 8:00 a.m. CET, CEO Andreas Kvame and CFO Atle Harald Sandtorv will present

the results live at Hotel Continental, Stortingsgaten 24/26, Oslo.

Following the presentation, it will be opened up for questions from the

audience. The presentation and the subsequent Q&A will be held in Norwegian.

A live webcast from the presentation can be accessed

at www.investor.griegseafood.com or with the following

link: https://channel.royalcast.com/landingpage/hegnarmedia/20231114_3/

Webcast participants need to register to post questions. A recording of the

webcast and an English transcript of the webcast will be made available on the

company's website.

For further enquiries, please contact:

Andreas Kvame, CEO

Cell phone: +47 907 71 441

Atle Harald Sandtorv, CFO

Cell phone: +47 908 45 252

For media enquiries, please contact:

Kristina Furnes, Chief Communications Officer

Cell phone: +47 48185505 / kristina.furnes@griegseafood.com

(mailto:kristina.furnes@griegseafood.com)

About Grieg Seafood

Grieg Seafood ASA is one of the world's leading salmon farmers. Our farms are in

Rogaland and Finnmark in Norway, as well as in British Columbia and Newfoundland

in Canada. Our headquarter is in Bergen, Norway. Grieg Seafood ASA was listed at

the Oslo Stock Exchange in June 2007.

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

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

both an ethical responsibility and drive economic profitability. 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.