Grieg Seafood ASA (OSE: GSF) Q1 2025 Earnings Call | 05/27/2025

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Grieg Seafood Q1 2025 Financial Results: A Shift Towards Profitability and Financial Robustness

Grieg Seafood ASA reported its First Quarter 2025 financial results, with newly appointed CEO Nina Willumsen-Greg emphasizing a strategic shift from growth to profitability and financial robustness. Despite challenging market conditions and past ambitious capital expenditure programs, the company is implementing a comprehensive transformation to stabilize its financial position and maximize shareholder value.

Q1 Performance Highlights:

EBIT (Earnings Before Interest and Taxes) for the group was NOK 220 million, or NOK 10.6 per kilo.
Rogaland, Norway, was the main margin contributor, delivering a strong operational EBIT of NOK 260 million. This was driven by excellent biological performance and an NOK 8 improvement in cost, offsetting lower realized prices.
Farming costs for the group improved by NOK 3.4 per kilo compared to Q4, largely due to better biology across regions.
Underlying production and growth were strong in all regions, particularly in Norway.
Harvest volume for the full group is on track to be just under 21,000 tonnes in Q2.
Superior quality fish increased significantly in Rogaland (to 83% from 57% last year) and Finnmark (to 64% from 47% last year), benefiting from renewed vaccination programs.

Strategic Transformation and Financial Discipline:

The core of Grieg Seafood's current strategy is a financial transformation program launched at the beginning of the year, reallocating resources to its strong Norwegian asset base.

Reduced CapEx: The company has reduced committed capital expenditure by over NOK 600 million, primarily by demobilizing a site in Newfoundland, emphasizing a focus on operational robustness over growth.
Strengthening Financial Flexibility: Grieg Seafood successfully placed a NOK 2 billion hybrid bond and initiated a sale-leaseback of its post-smolt facility in Finnmark to bolster its cash position and reduce debt. The remaining hybrid bond funds will be used to repay a green bond of approximately NOK 1.2 billion.
Cash Flow Improvement: The company improved its cash situation by approximately NOK 1.2 billion in Q1, with operating cash flow at NOK 158 million. Investments were significantly reduced to NOK 167 million for the quarter.
Canadian Operations: In Canada, the focus is on maintaining optionality and minimizing losses while exploring strategic alternatives. British Columbia faced high costs from prior environmental events, but the new government's shift in tone towards economic growth is viewed as potentially positive. Newfoundland, a greenfield project with long-term potential, is currently constrained by capital discipline, leading to elevated farming costs due to subscale production and underutilization.

Regional Performance and Outlook:

Rogaland: Consistently delivering strong operational performance. Estimated Q2 harvest of 9,200 tonnes, maintaining the full-year guidance of 30,000 tonnes.
Finnmark: Entered 2025 with high biomass and strong fish health after two challenging years. Estimated Q2 harvest just under 8,000 tonnes, with a full-year estimate of 32,000 tonnes (up 25% from last year). An incident of CMS at one site will have a limited overall effect on 2025 production.
British Columbia (BC): No commercial harvest in Q1. Q2 harvest estimated at 4,000 tonnes, with a full-year estimate of 12,000 tonnes. Focus remains on cost control amidst regulatory uncertainty.
Newfoundland: Concluded second-generation harvest in Q1 with high superior share. No harvest planned for Q2, with Q4 harvest expected to contribute to a full-year estimate of 10,000 tonnes. The company is actively working to ensure this region is not loss-making given its current subscale production.

About this video

Grieg Seafood ASA reported its Q1 2025 results on May 27, 2025, reflecting a challenging but transitional start to the year as the company advanced its financial transformation program and focused on operational improvements across core regions. Sales revenue for the quarter was NOK 2,183.8 million, down 4.6% from NOK 2,289.8 million in Q1 2024, primarily due to lower spot prices and slightly reduced harvest volumes. Harvest volume reached 20,770 tonnes (GWT), just below the 21,075 tonnes achieved in the same period last year. Operational EBIT for the quarter was NOK 221 million (NOK 10.6 per kg), down from NOK 292 million (NOK 13.8 per kg) in Q1 2024, and included NOK 68 million in one-off costs related to organizational restructuring and demobilization of the Newfoundland PSA site. The net loss for the period was NOK 312.5 million, a modest improvement from a loss of NOK 330.7 million in Q1 2024, reflecting ongoing biological challenges and market headwinds. Regional Performance and Operational Highlights Rogaland: Outperformed expectations with strong biological performance, reduced farming costs by 13% quarter-over-quarter, and achieved a superior share of 83% (up from 57% in Q1 2024). Realized price was NOK 89.8/kg, down 13% year-over-year due to lower spot prices. Finnmark: Showed good underlying biology and a promising outlook, but faced a cardiomyopathy syndrome (CMS) incident late in the quarter, leading to early harvests and higher costs. Achieved price was NOK 81.3/kg, with a superior share of 64% (up from 47% in Q1 2024). British Columbia: No commercial harvest in Q1, focusing on biomass growth and operational optimization amid ongoing political uncertainty. Survival rate was 84%. Newfoundland: Good biological performance with a high survival rate (94%), but operational EBIT was impacted by NOK 48 million in one-off costs. Harvest volume was 5,087 tonnes, and realized price was NOK 91.1/kg. Financial Position and Transformation The company successfully placed a NOK 2 billion hybrid bond, improving financial flexibility and reducing net interest-bearing debt by NOK 1,650 million. Capex investments in Q1 totaled NOK 167 million, mainly for post-smolt expansion in Finnmark, with planned investments for the rest of 2025 at approximately NOK 800 million. Free liquidity at quarter-end was NOK 2,037 million, and the equity ratio improved to 46%. Outlook Grieg Seafood maintains a full-year 2025 harvest guidance of 84,000 tonnes, with Q2 2025 harvest expected at 21,000 tonnes. The company expects higher farming costs in Q2 due to early harvesting of CMS-affected fish in Finnmark but anticipates improved cost efficiency for the full year, driven by operational enhancements and post-smolt strategies. Strategic focus remains on strengthening the Norwegian asset base, reducing debt, and protecting cash flow, while maintaining optionality in Canada as political and regulatory conditions evolve. About Inside Ticker: For more expert analysis and real-time updates on Grieg Seafood ASA (OSE: GSF) and other market movers, follow Inside Ticker and visit InsideTicker.com for in-depth reports, financial insights, and the latest news on leading companies. #GriegSeafood #GSF #EarningsCall #Q12025 #SalmonFarming #Seafood #Revenue #FinancialResults #Transformation #StockMarket #InsideTicker

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