Grieg Seafood Asa Ord

Then I hope everyone has had a good cup of coffee in the break. Next on the program before lunch is Greg Seafood with his second quarter talk. And we would like to welcome Andreas Kvorme and Adler Harald Sandtoff. Please.

Thank you. Then I would also like to welcome to the second quarter presentation to Greg Seafood. There we will have a following agenda. We will go a little through the highlights of what has happened through this quarter. We are going to look at the operations in the different regions. We are going to do a little update on strategy, and that Harald will come back and go through the financials in the company, and then in the end we will do a summary of the quarter. Before I start, this is a disappointing quarter for us, but in all principalities it is due to the situation in BC. I will come back to that in more detail. But when I look at the other regions, there is a lot of positive and between, both from Newfoundland and at least the two Norwegian regions, even though in the other quarter there was a continued impact, especially in Finnmark, when it comes to spirofishing. We have mentioned it several times. Operationally, så fikk vi et resultat på minus 35 millioner mot 547 i fjor, minus 2,30 kroner per kilo. Et resultat som er dårligt, men jeg er slett ikke fornøyd med situasjonen. BC is what has impacted us the most. In British Columbia, we had some biological events and low oxygen values, for not to say zero oxygen in a period in a special area there. This has followed now a little into, especially in July and the beginning of June, we have had, due to both that and algae, we have had some weak fish. And therefore we have chosen today, even though we are not completely finished with the event with algae, we have chosen today to guide the third quarter with 230-250 million. This will also impact the third quarter. That said, we are very happy that we have fought through a very tough period in Finnmark. As most people know, if we had a parasite in our fishing facility, it would affect the whole generation i kjø i Finnmark og påverker resultatet vårt. I stedet så er den 900 millioner den milliard på den generasjonen. Det er vi nå ferdig med i juli, og ser vi fremover så skal jeg gå mer inn på det når jeg kommer til Finnmark, men det ser veldig bra ut. Underliggende produksjon den går bra i begge regionene i Norge og i Newfoundland, og så har vi hatt og har fortsatt noen utfordringer i B.C. We build, and we have a lot of faith in our strategy when it comes to postage. I'll show you when I get back to that. In Rogaland, it works. As we get further, it works very well, but we construct both a facility in Rogaland, Ordalakva. We have Adam Selv in Finnmark and in Newfoundland. In addition to that, we work with our business facility in Gerdermoen, and this goes according to plan, time and cost. Vi har fått i juni en veldig merkelig beslutning fra myndighetene i Bridge Columbia, eller Ottawa. De tog en beslutning om at de skulle forby åpnet pen, altså opprett, i åpne merar. This is a decision that I am very surprised by, and it creates a lot of uncertainty, especially in relation to these regulations and so on, and where to start from. This has not been implemented. It was supposed to be out with us at the end of July. No one has seen anything about it. So there will be a hearing, and then this will go on until the beginning of next year before it is concluded. So I'm going to come back to that a little bit, but it causes great uncertainty. We have stopped all of our investments in BC. We have worked through the quarter. We have identified and hopefully have a partner in Canada. for to help us and contribute to get to the desired development, especially in Newfoundland and the construction of the large-scale plant that we are doing there. We expect to slaughter 16,700 tons now in the third quarter, and our volume is now guided at 78,500 tons, and that's all in It is a situation that has happened in B.C. Then I go straight over to the different regions. Rogaland is a stable, good region. It had a result of 55 million. And in all main states, it is due to... The decrease in EBIT is due to the fact that we slaughtered in June. As everyone knows, the prices went down through the quarter. We kept the fish, because it was related to winter wounds, that we got healing from winter wounds, and then it was slaughtered in June. So the prices were lower. Og kan jeg melde at kvaliteten på fisken i Rogaland er veldig, veldig bra, for det vi ser fremover. Vi forventer i 3. kvartal en stabil til nedgående kost, og i denne regionen. Og så, som vi var inne på, vi driver fortsatt med konstruksjon av postmaltfacilitet, og vi kommer til å sette inn den første fisken i Årdalakva i October. That means that we get a significant increase in capacity in Rogaland. We are up to 8,500-8,800 tons of mail to this region. That means that you have roughly 8,500-8,800 million fish per kilo. That is the capacity you have built up there. We expect Through this quarter, we have now slaughtered 8,500 tons, and that is equally divided through the quarter. For the year, we have upgraded the guiding in Rogaland to 28,000 tons. Finnmark received a negative EBIT at 12,70 kroner, or 3,50 kroner. and 30 euros per kilo. This is mainly due to the spiro fish that we have lost. But as I said at the beginning, I am very glad to be able to mention that there is no spiro, neither in the sea nor at our fishing facilities, and that means that they De tiltakene som ble iværksett med merfiltrering, større bruk av et stort UV-anlegg og så videre, gjør at forhåpentligvis aldri ser dette igjen. The reason why the results are negative is that this fish has had low average weight and high crust. And that you sell in a market with small fish that has a completely different price, as well as that we have had winter sores on this, and there has also been this link with the net. I can also note that it looks very, very good. It's going well. We expect a drop in cost in the third quarter and into the fourth quarter. The quality of the fish is good, as we see it today, and we expect that it has taken some time with the spiral, so we had to build it down in the biomass. But now we have... At the end of this month, we are at the top MTB in Finnmark, which is about 30 MTB at the level of slaughter volume, which we are guiding at 20-20,000 tons. As I said, we expect a decrease in cost. By slaughtering about 5,000 tons, which means that we have a whole lot of volume, we will go out at the end of the year and get ready to keep the guiding at 20-20,000 tons. Adam himself, what we do with the post office, it goes without plan and without cost. So it's BC. It's a completely different story. It's not fun for anyone, but we got a result of minus 42 million in the quarter. And I must say that there was some back and load there as well. And the American market was not with us, to put it simply. And especially not on sizes that did not have it. It was too small for the market. And very much 2.3 and 3.4, a average of 3.8, gives it. We got big challenges with downloads. It was because, as I was saying, we got a very low oxygen level in the sea, which means there was no oxygen. It is something that happens year after year. I have been away once before, and that was ten years ago. It happened that a flake came in in an area that is empty of oxygen. And then there is too much to breathe. We have had equipment both with ventilation and we have oxygenation in some of the localities, but it has been enough to take such a heat. When we were done with With low oxygen, which actually lasted quite a long time in relation to the historical event, the algae came. The poisonous algae, both those that went high in the sea, but also those that went very low in the sea. So you don't have much help in the selection, because you push the algae into the lakes. There we got low growth, with small biomass and small fish entering a market that was a bit challenging. We have chosen to guide for three quarters now. We are not completely finished with algae yet, but there are very small fish that can Our best estimate is that we get a negative effect of 230-250 million in the course of three quarters. To guide on that. For 2024, the volume will be 12,500 tons. We know that because we are finished. And that's what we look at the guiding for the company. We have guided down with the consequences of what has happened in B.C. And then there is this with the uncertainty in B.C. It is still big, and that means that we must hold back on our investments in this area until we know how this will look in the future. And as we have been talking about earlier, this with the partner project in Canada, Det dreier sig ikke bare om Newfoundland, det er den kanadiske operationen som en helhed. Det dreier seg om, og ja, jeg skal ikke si så mye mer om dette på den planen siden. Newfoundland is a very stable region. The operational EBITDA here is on the negative side, because there are some sales costs allocated. When you don't make fish, it becomes that, plus some other costs that make you get a negative EBITDA. But production in the sea is going very well. We have a high survival rate on the fish, and we expect to slaughter earlier than we did last year. Last year we started to slaughter in November, and now we're starting in late September and into the fourth quarter. We haven't guided anything in the third quarter yet, but we have good growth on the fish, which can make us start a little earlier. Guided over 11,000 tons total for Newfoundland this year. And it can happen that we start in Q3, but we have guided it to Q4. The post-smolt facility there is also an aquamaroff facility. It goes its own way. We have a smolt facility, and now it is ready to install a post-smolt facility. over there. In addition, we have hired a new regional chief, Knut Skedsvold, who was there earlier. He has left. And Elisabeth Barlow. Elisabeth Barlow. She came from the industry and has worked in a long time horizon in different companies. In addition to these, she has worked in the public, which is also very important. It is in DFO, Department of Fisheries and Ocean, on the Newfoundland side. It started with us on July 8th. This is what we are proud of. I think we have come quite far in relation to many in the industry when it comes to post-malt. There are many big advantages to having post-malt than more robust fish. Mindre lysebehandling, god tilvekst. Vi har som sagt lite lysebehandling på denne fisken. Vi har også redusert dødeligheten betydeligt i Rogaland. Det er den som er pioneren, den som har vært først med postmål hos oss. Ser vi på totalvolumen nå, i løpet av de neste to årene, så vil dette materialisere seg. Rogaland, about 9,000 tonnes. Finnmark, about 5,500 tonnes. BC, we haven't put anything on. Newfoundland comes up with volume when Postmalt A, which we are now building on, is finished. And the total in the group will be in the next two years the same double volume, that is to say that we have about 17,000 tonnes. med smalt på land, på smalt på land, i løpet av denne perioden. Det er et stort steg for oss å gjøre, men vi er helt trygge på at det er veien å gå i et oppdrett som har blitt mer og mer krevende i kjøfasen. When it comes to Nedstrøms, we continue to work on that. It is an installation on Gardermoen. It is a leased building, and there is an investment cost of around 130 million in investment. We expect that this will be finished in the course of next year. Hopefully we can start using it in the second half of the year. It's over there, but things tend to go a little later, or at least I think sometimes. Men det er det som er planen og det som er målet. Vi har ansatt Christian Mathiasson, som er ny fabrikschef på Gardermoen. Leng og god oppdrettserfaring og fabrikkerfaring fra tidligere, både fra Norge og Island. Da tror jeg jeg skal overlå det ordet til deg, Antle Harald, og gå gjennom det finansielle.

Ja. Thank you, Andreas. Let's talk about the finances. As Andreas mentioned, the quarter is marked by a lot of slaughter from B.C. with weak fish. We also slaughtered late in the quarter from Norway, in a market with dangerous prices. Volumen var 15.000 ton og det er nå ned fra de tilsvarende kvartalet i fjor og omsetningen ble då 1,5 milliarder som også er nå ned. Så fikk vi då en operationell ebit på minus 34,8 millioner kroner. Our value line is negative this quarter, and this is in connection with the price falling, and this is where we value the fish for the value we can sell them for in the future. So it will be negative with 556 million. Then we have a financial line here that is also a little more negative than usual. About half of the 164 million in minus here is due to a weakened Canadian dollar, and that is an effect we get in that line when one part of our in Canada then becomes less valuable compared to CAD enough. This is an effect that goes up and down with the currency change from quarter to quarter. So then we got a result after taxes of minus 700 million kroner. If we compare with Q1, where we had an EBIT per kilo at 13.8, the prices have gone down in the quarter with 8.6. Especially the fact that we slaughtered late in Norway has contributed to that. The farming cost has gone up with 7 kroner. The higher percentage from BICI has raised the cost. We ended up with an EBIT kilo of 2.30 euros. A little about our development in yield and balance. We entered the quarter with a net yield of 3.6 billion. And then we had an EBITDA of 128, which is a relatively weak EBITDA in the quarter. And then we used money to build biomass with 158 million. And Andreas has been a bit into it. Getting up to max MTB in Norway has been an important measure for us. We invested for 307 million. We will come back to that. Then we paid the exchange rate of 196 million. And then we had other effects, where, among other things, payable interest rates are at 132 million. So the net interest rate of Berniel is 4.3 billion out of the quarter. It is of course an important goal for us to strengthen the balance. Our most important raw material is of course in good operation and a good EBITDA. What we do in Norway is especially important in relation to strengthening the balance in the future and good operations. So, of course, what partners are seeking to do in Canada is a measure in relation to our balance, and not least that we have stopped all investments in BC is also an important measure. Next, I will show you what Jelva consists of. The green bond is at 1.4 billion, and the term loan is at 1.8 billion. We have drawn up a revolver credit of 960 million. And we have a free liquidity of 1.6 billion. It consists of bank cash of 366 million, and then withdrawing revolver credit of almost 1.3 billion. Our investments. We invested, as I said, 307 million in the quarter, and yet today we have invested for 592 million. We are now guiding that we will invest a total of 1.4 billion within each year. This mainly consists of what we call balance investments, which is a pure exchange of existing equipment, nuts and so on, for 300 million. And then there is the expansion of the post office in Finnmark with 400 million. There we guided on 500 last quarter, so there we added 100 million, so there is a little periodization between the years. And then finally there is Newfoundland with both localities and further construction of the post office there, a total of 700 million. Finally, we see that we are building biomass further. Again, as Andreas was saying, it is important to get up to max MTB in Norway. In total, it is estimated at 500 million per year. And that is the sum of all regions. To sum up, we have a capital percentage of 42%. If we calculate it according to Covenance, we have IFRS 16 obligations outside, which is 45%. And Covenance against banks. The free liquidity is 1.6 billion, as mentioned. We paid 1.75 kroner in spending. It was paid out in the quarter. Our yield is now around 55 kroner per kilo. It is an important focus area for us to strengthen the balance. The green part of our yield now accounts for 73%. I give the floor back to Andreas.

Ja, takk skal du ha, Atle Harald. Då skal vi se litt på Outlook og til slutt en oppsummering. Markedet har vært litt depressed, spesielt i USA og Nord-Amerika i den siste tiden. Det skyldes også litt, om vi skal si, recessjon, men det er dyr tid som gjør dette, som har gjort at priserne har falt. Retail chains have not changed as before. The prices have fallen, but the volume has been relatively well maintained, but the prices have come down. We see the same in Europe. There we have also had some challenges as an industry. One of the pieces is that a lot of frozen products have been sold, as a result of a decision that was made in the EU about... Laksen, like Refrassen, has been in the market for 48 hours. It has been there, and it has been destroying the market for a while. Hopefully, the market will start to normalize. When the prices go down, the retail chains will start to run promotions and campaigns in stores. And it has a good effect on that, and we're getting more and more questions about the promo for retail chains around Europe. The Asian market has been pretty good all the way, but it's a big fish market in general. The main thing that has been good there. We have a relatively small contract share in Gregg Seafood. We are at 9-10% in the third quarter. For years under one, we are at about 10%. We work to increase the proportion of further-producing products. This is what we do as partners today, and in production. But hopefully we will be able to get Gardermoen up to 10. And our goal in 2026 is that we will have a 6-20% market share in imported products. And that means a lot for our company, that we have the opportunity to upgrade fish, but also to make imported products that the market has a lot of questions about. We have been talking about the guiding, which is 16,700 tons, 8,500 tons in Rogaland, 5,000 in Finnmark, and 3,200 in Bici, which is the main source. So that's 16,700. Then there are 25,000 tons in the last quarter, to reach a volume of 78,500 tons, which we are now stuck with the guiding. I was also talking about... situation in BC, which means that we have chosen to guide it to 230-250 million, which is very negative, but it is at least here we have identified that this is how we think it will be, and even if we are not finished, we have taken it. So, summarized, BC results, we are absolutely not satisfied. It has been an extremely demanding quarter, and in the third quarter, due to Low oxygen values, algae and lice treatment in all this, and low fluorine as a result of this, have also had significant mortality in the form of low oxygen. It has been challenging in Finnmark for almost 18 to 20 months, but there we see lice. In Finnmark it is going very well. Fisken er fin, god kvalitet, god foring, høyt oppe på superjørendel. Men vi hadde litt igjen av spirofisken som ble tatt inn i tredje kvartalet. So production in Norway, it goes well and improves day by day, to put it that way. And the costs will go down through the third quarter and into the fourth quarter. It goes plan-wise, both in Rogaland and Finnmark and Newfoundland, and construction on Gardermoen. So I expect it to go well. Last but not least, we have been working with a partner search in in Canada, and the last status there is that we have great interest. We have received indicative offers in Canada, and the process is underway, and we expect to finish this in the course of the autumn of this year. Then I think I'll just open for questions.

We can start with a question from the web. And why are we investing so hard in Bisu when it seems that we are always in trouble in the region?

No, now we are not investing hard. That is probably the answer. Because we have stopped all investments there, and we will not open up for any of this until we have explained both politically and in relation to this with the partner situation that we have communicated earlier.

Yes. Vi har jo kommunisert et negativt resultat i BC på 230-250 millioner i Q3. Det er jo et spørsmål på hva det består av.

I all hovedsak er det effekten av disse elgeutfordringene vi har, at vi ikke forforer fisken vår. Det er den ene biten av dette, det vil si at den er liten. den fisken ser. Det er nedskrivninger i form av dødelighet, som er ganske høy, på grunn av giftige elger, og det er priserne i markedet som er betydelig lavere enn det som vi hadde forventet.

Så det er et spørsmål på når vi forventer positiv drift igjen.

Ja, nå er vi jo ferdig for i år med dette, og vi går inn i neste år, der vi skal ha smalt utsettet i In October, we have some smelt in the sea, but some of this is also part of the fish that is affected now in the third quarter. So on an EBIT level, I don't know what the price will be, but in any case, there is an enormous focus on reducing costs in BC, and there we do what we can to get both the fixed costs and the variable.

Og så er spørsmålet på om det er fortsatt interesse for BC assets til tross for uavklarte reguleringar. Du har vært litt inne på det.

Ja, det kan jeg si det er.

Og videre så er det realistisk å få avsluttet M&A-prosessen i Kanada in Q3?

Ja, jeg tror vi vil svare at dette er høsten. Om det blir... i slutten av september eller det går inn i oktober eller det blir november, det tar vi ikke svar på.

Det var det som var på webben, Folleby. Da åpner vi opp for salen hvis det er spørsmål der. Det er det ikke. Da gjenstår det vel bare å tacka oss.