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    LSG   NO0003096208


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Ler°y Seafood Group ASA: Q3 2021 Results

11/11/2021 | 03:13am EST

RESULT Q3 2021

In Q3 2021, Lerøy Seafood Group (LSG) reported revenue of NOK 6,325 million, compared with NOK 4,773 million in the same period in 2020. Operating profit before fair value adjustment related to biological assets was NOK 579 million in Q3 2021, compared with NOK 370 million in Q3 2020. The positive development from Q3 2020 is attributed to improved earnings from the land-based industry in the Wild Catch segment, substantial growth in harvest volume for the Farming segment, the lifting of COVID-19 restrictions resulting in a positive development in prices and, finally, the continued positive development for the VAPS&D segment.

“Revenue in Q3 2021 is up 33% on the same quarter last year, mainly due to increased activity and higher prices. We recorded our highest ever quarterly revenue as well as all-time high harvest volumes. Demand for seafood is, in general, very strong, giving grounds for an optimistic outlook for the future of the industry,” confirms CEO Henning Beltestad.

“At the same time, our earnings in the third quarter are lower than what we expected at the start of the quarter. During the final weeks of the quarter, we had to make changes to our harvest schedules, and were forced to harvest early at lower weights than planned. This had a negative impact on both prices realised and costs. We also under-estimated the export volumes from Norway, especially in September,” continues CEO Henning Beltestad.


The wholly owned subsidiary Lerøy Havfisk's primary business is wild catches of whitefish. Lerøy Havfisk has licence rights to harvest just above 10% of the total Norwegian cod quotas in the zone north of 62 degrees latitude, corresponding to around 30% of the total quota allocated to the trawler fleet. Lerøy Havfisk also owns several processing plants, which are mainly leased out to its sister company Lerøy Norway Seafoods (LNWS) on long-term contracts. Lerøy Havfisk’s trawler licences stipulate an operational obligation for these processing plants.

Lerøy Havfisk has had 10 trawlers in operation in Q3 2021. The catch volume in Q3 2021 totalled 12,336 tonnes compared with 11,083 tonnes in Q3 2020. A higher volume of cod in the catches is the most important factor behind the increase in catch value when compared with the third quarter of 2020. Lerøy Havfisk has a large quota remaining in 2021, and therefore solid foundation for good profitability in Q4 2021. The company is in a strong position to be able to fully capitalise on their cod quota. The remaining quotas for saithe and haddock have been affected by major re-allocations throughout the year. It is normal for the catch volumes for these species to be unpredictable, but the company still expects to see satisfactory catches.

The most important markets for whitefish remain slightly affected by COVID-19 restrictions, but the development in demand is good and most products have seen a positive development in prices. Compared with Q3 2020, prices realised for cod are down 3%, while prices for haddock and saithe are substantially up, by 59% and 35% respectively.

LNWS’s primary business is processing wild-caught white fish. The company has use of 12 processing plants and purchasing stations in Norway, five of which are leased from Lerøy Havfisk. For several years now, it has been extremely challenging to process whitefish in Norway, and Q3 2021 has been no exception. It is, nonetheless, rewarding to note the significant improvement in land-based operations. This has also led to an improvement in the financial results in the third quarter of 2021 when compared with the same period last year.

The Group’s focus on boosting the competitiveness of the white fish industry is a long-term process and will continue undiminished, despite what the Group presumes are temporary market-related challenges brought about by the pandemic. Over time, the Group has carried out organisational changes and made significant investments in facilities, which we expect to produce sustainable earnings.

In total, the segment reported EBIT of NOK 17 million in Q3 2021, compared with NOK -50 million in the same period of 2020. Lerøy Havfisk has a high volume remaining of its cod quota as of the third quarter when compared with the same period last year.

“Earnings in the Wild Catch segment have improved significantly in the third quarter compared with 2020. It’s very encouraging that the underlying improvements in land-based operations are gradually delivering increased earnings in this part of the business,” says CEO Henning Beltestad.


The Farming segment comprises the Group’s three farming regions in Norway: Lerøy Aurora located in Troms and Finnmark, Lerøy Midt located in Nordmøre and Trøndelag and Lerøy Sjøtroll located in Vestland.

Operating profit for the Farming segment before fair value adjustment related to biological assets was NOK 427 million in Q3 2021, compared with NOK 308 million in Q3 2020. During the quarter, the Farming segment harvested 56,000 tonnes, compared with 44,000 tonnes in Q3 2020.

In Q3 2021, Lerøy Aurora reported EBIT/kg of NOK 9.30, Lerøy Midt reported NOK 9.0 and Lerøy Sjøtroll reported NOK 4.0. In total, EBIT/kg for the segment was up from NOK 7.0 in Q3 2020 to NOK 7.6 in Q3 2021.

“Growth at the end of Q3 2021 and particularly the start of Q4 2021 has been slightly lower than expected. The estimated harvest volume in 2021, including the share from associates, is approx. 204,000 GWT, with an estimated 207,000 GWT in 2022,” he continues.

“We expect costs in Q4 2021 to be lower than in previous quarters in 2021, although this potential is affected by the inflation in the cost of many of our raw materials we are now experiencing, including feed, which is our largest cost item,” comments Henning Beltestad.


With its fully integrated, cost-efficient value chain for salmon, trout, whitefish and shellfish, Lerøy Seafood Group shall supply products that are best suited to the consumers’ preferences. Proximity to key markets and knowledge of the customer’s needs are therefore of decisive importance if the Group is to develop demand for its main products. In the course of a calendar year, Lerøy distributes a wide range of seafood products from Norway to more than 80 different markets. In addition, the Group processes and distributes a number of market-specific seafood products to their respective local markets where Lerøy has operations. Lerøy Seafood Group’s value chain shall be developed further in order to satisfy and increase the consumers’ total demand for seafood.

In 2020, seafood markets were negatively impacted by the COVID-19 pandemic. The impact was seen first in markets in Asia, spreading globally through the second and third quarters of 2020. The COVID-19 pandemic has affected the pattern of demand. The retail market now represents a larger volume of consumption, while the hospitality and catering segment in many core markets has practically been closed down for long periods over the last year. The pandemic has also had an impact on logistics, particularly for overseas markets, with a reduction in cargo capacity resulting in increased costs during the period.

Demand for seafood in the retail market remained strong in Q3 2021, and we have also seen a gradual improvement in the hospitality and catering market as, little by little, COVID-19 restrictions have been lifted. The Group is experiencing a very strong demand for seafood, and the segment’s revenues are up 33% compared with the same quarter of last year, with growth driven by both prices and increased activity.

The segment’s underlying development is good, but continues to be impacted by start-up costs for the Group's new factories in Spain and Italy. In total, operating profit before fair value adjustment of biomass reported by the segment amounted to NOK 166 million for Q3 2021, up from NOK 131 million in the same period in 2020.

“Development in our downstream operation is positive and increased capacity utilisation drives profitability. We incur start-up costs relating to new facilities and there is potential for further increased activity and profitability going forward”, says CEO Henning Beltestad


Price developments for Atlantic salmon have been very volatile in 2021, substantially influenced by the ripple effects of the COVID-19 pandemic. It is not possible for the management and Board of Directors to form any precise opinion on the duration or consequences of the pandemic, but developments in 2021 provide grounds for optimism. There are indications that seafood is gaining in popularity with consumers, and we are therefore optimistic with a view to the underlying future trend in demand for seafood, and consequently for the Group’s operations and value creation.

The Group’s production of red fish currently takes place mainly in Norway. Norwegian and global salmon and trout production are experiencing relatively modest growth, which – combined with a weaker Norwegian krone – has resulted in very high prices. This provides an incentive to start production of salmon in new areas using alternative technologies. These incentives have existed for several years now, but with long lead times for developing the industry, sea-based production in Norway has remained dominant. The harvest volume from land-based production of salmon remains insignificant on the end markets. The market share for Norwegian Atlantic salmon may, in the long term, be affected by production of salmon and trout in new regions and locations. Through business development, investments and a clear operational focus on competitiveness, the Group shall ensure that its value chain stands strong in the face of competition in the years to come. As well as developing existing farming operations, the Group is accumulating knowledge and/or expertise within both land-based and offshore salmon production.

In recent years, Lerøy has made significant investments in several parts of the value chain, including the construction of facilities for smolt/post-smolt capacity in all the Group’s regions. Lerøy Sjøtroll’s Kjærelva facility is now completed and has an annual biomass production of around 4,000 tonnes. In the fourth quarter of 2020, Lerøy Aurora completed the final stages of construction for their smolt facility in Laksefjord. Lerøy Midt can report that the second stage of development of the Belsvik facility is going to schedule. The plan is for completion in the first quarter of 2022, and the facility will produce around 5 thousand tonnes of biomass. The schedule is to introduce the first roe in the first quarter of 2022, and the results produced by the facility are expected to gradually materialise from 2023. The Group’s investments in improved smolt production and post-smolt production, combined with a number of other initiatives, will support the Group’s ambition for continued growth in volume and improved competitiveness by means of lower production costs.

The Group has recently worked on a project in Årskog in Fitjar for further development of large smolt. Based on several factors, including COVID-19 and related consequences, the Group has decided to postpone the final decision regarding commissioning.

The Group achieved significant improvements in production in the sea in 2020. The harvest volume was up from approximately 158 thousand tonnes in 2019 to 171 thousand tonnes in 2020. Moreover, standing biomass increased from 111 thousand tonnes at year-end 2019 to 119 thousand tonnes at year-end 2020. The first months of 2021 were cold, affecting growth conditions negatively. Growth was good in the second quarter, while the late autumn of 2021 had slightly lower growth than expected. Since November 2020, the Group has reported a projected harvest volume for 2021, including associates, of between 205 and 210 thousand tonnes. At the time of writing, our best estimate is approximately 204 thousand tonnes.

For its consolidated operations, Lerøy Seafood Group currently estimates a harvest volume of 190 thousand tonnes in 2022. The Group's share from associates is forecast to be 17 thousand tonnes. This does not include the increased share from associates, which will depend upon the final approval of Scottish Sea Farms Ltd.’s acquisition of Grieg Seafood Hjaltland. The estimated total harvest volume in 2022 is expected to be approximately 207 thousand tonnes.

The Group has made substantial investments in whitefish in recent years. One new vessel was added to the fleet in 2018 – Nordtind – and another in early 2020 – Kongsfjord. Further improvements to fish quality were priority design criteria for Kongsfjord. Consumers are making ever-increasing demands and expectations on quality. High quality and competitiveness are essential for success when competing for consumers’ preferences.

The whitefish industry still faces significant challenges in relation to the impact on demand of COVID-19. It is naturally not possible for the Group to know how long the restrictions will last, but Lerøy’s long-term plans remain the same. The work on and investments in making the factories less seasonally dependent continue, along with well-organised and meticulous work on making improvements to each unit. We believe that this process will generate results with time.  

The Group’s quotas for 2021 are up 17% for cod, up 22% for haddock, up 16% for saithe north of 62 degrees, and down 43% for saithe south of 62 degrees. Third-country quotas were re-allocated and distributed during the summer, resulting in an increase in the quotas for cod and haddock of 21% and 37% respectively when compared with the same period in 2020. The quota for saithe north of 62 degrees latitude is up 17% and the saithe quota south of 62 degrees latitude remains unchanged from 2020.

In June, ICES (the International Council for the Exploration of the Sea) published its recommendations for the total quotas of cod, haddock and saithe in 2022. These recommendations entail reductions in the cod and haddock quotas of 20% and 23% respectively. For saithe north of 62 degrees latitude, a quota roughly equivalent to that in 2021 is recommended, while a 24% reduction in the total quota is recommended for North Sea catches. In October, Norway and Russia ratified a quota agreement for 2022 that mainly complies with the ICES recommendations.

Lerøy works to develop an efficient and sustainable value chain for seafood. This not only provides cost-efficient solutions, but also quality, availability, a high level of service, traceability, and competitive climate-related and environmental solutions. Investments in recent years, e.g., in a new industrial facility for Lerøy Midt, a new factory in Stamsund and new factories in Spain, the Netherlands and Italy, close to being commissioned, will make a positive contribution in the years to come. The management and Board of Directors are confident that Lerøy is well-positioned for continued profitable growth and development of Group operations.

Lerøy Seafood Group issued their first bond loan in Q3 2021, and the Group was rated as “investment grade”. The bond loan was executed in a so-called green framework. Demand from investors has been very good. It has always been important for Lerøy to retain the trust of the capital markets.

On 29 June 2021, Scottish Sea Farms Ltd. (SSF) – a joint venture between Lerøy Seafood Group ASA and SalMar ASA – signed an agreement to purchase 100% of the shares in Grieg Seafood Hjaltland (GSHU) from Grieg Seafood ASA. Please refer to other reports for details of the above. The transaction is expected to be completed by the end of Q4 2021, assuming approval is obtained from the relevant authorities and the standard terms and conditions.

The Group’s products are healthy and tasty. Production is sustainable from a financial, climate and environmental perspective. The management and Board of Directors continue to expect good underlying growth in demand in the years ahead. It is not possible for the management and Board of Directors to estimate how long the COVID-19 pandemic will last, but we are increasingly confident, in recent months, in assuming that demand for high-quality seafood will continue to grow in the years to come.

The Board of Directors underlines that uncertainties related to assessments of future developments remain higher than normal, but believes that the strong development in demand for seafood gives grounds for optimism. At the same time, the Group is currently experiencing inflation in the costs for important input factors, and this will impact cost developments in 2022. Nonetheless, the Board of Directors is confident that the Group has a strong position for the years to come. The Board of Directors currently expects earnings in Q4 2021 to be higher than in Q3 2021, with a corresponding improvement for 2021 as a whole when compared with 2020.

The Board of Directors and corporate management would like to thank all the Group’s employees for their valuable work to date during the COVID-19 pandemic.

For queries, please contact:

Sjur S. Malm, CFO Lerøy Seafood Group ASA, +47 41 77 20 20


Lerøy Seafood Group ASA is a global seafood corporation with its head office in Bergen. The Group's approx. 5,000 employees handle between 350,000 and 400,000 tonnes of seafood every year through 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 represent the very foundations of 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% p.a. The Group has set a number of targets within sustainability, including cutting greenhouse gas emissions by 46% by 2030.



  • Q3 21 Presentation LSG
  • Q3 21 report LSG

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Sales 2021 22 792 M 2 598 M 2 598 M
Net income 2021 2 425 M 276 M 276 M
Net Debt 2021 4 294 M 489 M 489 M
P/E ratio 2021 17,4x
Yield 2021 2,54%
Capitalization 42 207 M 4 825 M 4 811 M
EV / Sales 2021 2,04x
EV / Sales 2022 1,87x
Nbr of Employees 5 000
Free-Float -
Duration : Period :
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Technical analysis trends LERěY SEAFOOD GROUP ASA
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 6
Last Close Price 70,88 NOK
Average target price 77,80 NOK
Spread / Average Target 9,76%
EPS Revisions
Managers and Directors
Henning Kolbj°rn Beltestad Chief Executive Officer
Sjur Svenningsson Malm Chief Financial Officer
Helge Singelstad Chairman
Didrik Oskar Munch Independent Director
Siri Lill Mannes Independent Director
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