Leroy Seafood Group — Earnings Release 2022

Aug 24, 2022

Lerøy Seafood Group ASA: Q2 2022 Results

Lerøy Seafood Group ASA: Q2 2022 Results

HIGH PRICES GIVES RECORD HIGH QUARTERLY REVENUE

Operating profit for Q2 2022 excluding settlement costs and before fair value

adjustment is NOK 923 million, up 58% on the same period of 2021. Strong demand

for seafood, including a substantial increase in prices realised for the Group's

main products, is the key factor in the year-on-year earnings improvement.

The Farming segment delivered improved results in the quarter. Salmon prices

were high again in the second quarter, based on continued high demand and low

supply. The harvest volume was slightly lower than in the same period of 2021

but will increase in the second half of the year. Inflationary pressure in the

economy and the low harvest volume are affecting cost developments.

The total salmon and trout harvest volume for full-year 2022 is estimated at

203,000 GWT (including Lerøy's share in Scottish Seafarms).

"The harvest volume of salmon and trout will increase in the second half of the

year. As usual, there will be a seasonal reduction in prices in the second half,

but the underlying market is robust, and we expect earnings in the Farming

segment to remain good," Beltestad explains.

The extreme price development for seafood and cost inflation for almost all

input factors are having a bearing on results in the VAP, Sales & Distribution

segment. The Group supplies a large share of its products on a contract basis to

strategic customers in the end markets, and it takes time for higher prices and

cost inflation for input factors, such as transport costs, to be fully reflected

in the markets.

"Lerøy has developed long-term relationships with a number of strategic

customers, which ensures stability and is a premise for building the world's

most efficient and sustainable value chain for seafood. However, it will take

time for the recent cost inflation to be fully reflected in the value chain.

This has a negative impact on earnings in VAP, Sales & Distribution, but the

long-term picture is unchanged, and we expect to see a gradual improvement

through the second half of the year," Beltestad says.

Results for the Wild Catch segment improved significantly compared with Q2

2021, driven by high prices and higher catch volumes. Higher bunker costs are

affecting cost developments.

"Seafood is a sustainable, nutritious and tasty protein source with attractive

market prospects - including in the long term - driven by ever increasing

demand. There is of course great uncertainty in the global economy at present,

but history has shown seafood markets to be resilient, even in difficult times.

Efforts to develop the value chain and further strengthen our position with

strategic customers continue. We have competent and motivated employees working

towards this goal every day," Beltestad continues.

Lerøy is hosting its first ever Capital Markets Day on 22-23 September. "We look

forward to providing a deep dive into our strategy and farming operation for

investors, analysts and other stakeholders, and demonstrating parts of our

fantastic value chain in practice," Beltestad finishes.

Queries may be addressed to the company's CEO, Henning Beltestad, or to the CFO,

Sjur S. Malm.

ABOUT LERØY SEAFOOD GROUP ASA

Lerøy Seafood Group ASA is a global seafood corporation with its head office in

Bergen. The Group's approx. 5,500 employees process between 350,000 and 400,000

tonnes of seafood every year via our value chain, corresponding to around 5

million meals every day. The Group has a vertically integrated value chain for

red fish and whitefish, and significant activities using third-party products.

The Group's values - open, honest, responsible and creative - shall underpin

everything we do, and we work hard to achieve our goal of creating the world's

most efficient and sustainable value chain for seafood. The target for return on

capital employed (ROCE) is 18%. The Group has set a number of targets within

sustainability, including cutting greenhouse gas emissions by 46% by 2030.