SATISFACTORY OPERATING PROFIT UNDER PREVAILING MARKET CONDITIONS
In the first quarter of 2012, Lerøy Seafood Group had a turnover of NOK 2,164 million, representing a decline from NOK 2,225 million for the same period in 2011. The Group's operating profit before fair value adjustment of biomass was NOK 103.2 million in the first quarter of 2012, compared with NOK 445.8 million in the first quarter of the previous year. The decline in operating profit before fair value adjustment of biomass is attributed to substantially lower prices achieved for the Group's main products, Atlantic salmon and salmon trout. In addition, the Group has expensed a total of NOK 50 million in write-offs and other costs in relation to the close down of Lerøy Hydrotech's slaughterhouse in Kristiansund. The Group's underlying production costs have, as a result of very good growth, together with somewhat lower feed prices, slightly fallen in the quarter. The good growth has also materialized in record-high harvest volumes for season. In the first quarter of 2012, realised contract prices have not substantially deviated from prevailing spot prices. The Group's share of contracts was 27%, and the current share of contracts is lower than what the Group considers normal. However, this figure must be viewed in the light of the weak price development experienced over the past quarters.
As a result of considerably lower prices and higher costs for released from stock products, the associated company Norskott Havbruk (owner of the Scotland-based Scottish Sea Farms Ltd) achieved considerably lower net earnings in the first quarter of 2012 compared with the first quarter of 2011. Income from associated companies before fair value adjustment of biomass therefore saw a reduction from NOK 29.0 million in the first quarter of 2011 to NOK 8.9 million in the first quarter of 2012.
The Group's profit before tax and fair value adjustment of biomass in the first quarter of 2012 was NOK 89.4 million against NOK 458.0 million in the first quarter of 2011.
Some interesting key figures:
- 36.3 thousand tons gutted weight of salmon and salmon trout harvested (Q1 2011: 27.9)
- Turnover NOK 2,164 million (Q1 2011: 2,225)
- Operating profit before fair value adjustment of biomass NOK 103.2 million (Q1 2011: 445.8)
- EBIT/kg all inclusive NOK 2.8 (Q1 2011: 16.0)
- Profit before tax and before fair value adjustment of biomass NOK 89.4 million (Q1 2011: 458.0)
- Spot prices for whole superior salmon have seen a decrease of 34.6% compared with Q1 2011
- Net interest-bearing debt was NOK 1,679 million (NOK 940 million at 31.03.2011)
- Equity ratio 51.0%
FINANCIAL SUMMARY 1ST QUARTER 2012
Net earnings for the first quarter of this year corresponded to a profit before fair value adjustment of biomass of NOK 1.26 per share, against a corresponding figure of NOK 5.80 in the first quarter of 2011. The number of outstanding shares is 54,577,368. The Group's annualised return on capital employed (ROCE) before fair value adjustment of biomass was 6.0% in the first quarter of this year, against 28.1% in the same quarter of the previous year. The Group's financial position is solid, with book equity of NOK 6,040 million, corresponding to an equity ratio of 51.0%. The Group's net interest-bearing debt at the end of the first quarter of 2012 was NOK 1,679 million against NOK 940 million at the end of the first quarter of 2011. During the period, a dividend of NOK 546 million has been paid. In addition, the acquisition and consolidation of rode Beheer B.V. has increased net interest-bearing debt by NOK 110 million.
The Board of Directors has proposed to the Annual General Meeting on 23 May 2012 that the dividend is set at NOK 7.0 per share. The shares will be quoted ex-dividend on 24 May 2012.
THE MARKET SITUATION/OUTLOOK
The Group expects significantly growth in the global supply of Atlantic salmon the coming year. However, the development in demand is extremely good, and lower prices provide grounds for optimism as to continued positive development in demand. Good demand together with expectations for improved productivity in the Group's production facilities, including improved biology, provides justification for the Board's positive attitude towards the Group's development.
The Board of Directors currently anticipates a considerably poorer result (before fair value adjustment) for the Group in the second quarter of 2012 than was achieved in the second quarter of 2011, and correspondingly for 2012 as a whole.
Questions and comments may be addressed to the company's CEO, Henning Beltestad, or to the Group Chief Accountant, Arne Vatne.
Bergen, 14 May 2012
The Board of Directors of Lerøy Seafood Group ASA
