Grieg Seafood ASA: Discontinues operations in Skye, taking loss of NOK 100 million in Q3 2020

Grieg Seafood has decided to discontinue its operations on the Isle of Skye in Scotland, evaluating alternative set-ups outside the company. Following an incident of high mortalities, parts of the operations will be liquidated immediately.

Combined with weak market prices impacted by the covid-19 pandemic, and low harvest weight, the event will impact Grieg Seafood’s result for the third quarter negatively with approximately NOK 100 million. Remaining fish in the area will be harvested in Q4 2020 – Q1 2021, with expected high cost as a result of the incident.

As part of its long-term strategy of sustainable growth, where the focus is on operational areas with growth potential, Grieg Seafood in August 2019 initiated an evaluation of its Skye operations. There are few operational synergies between Grieg Seafood’s main operations in Shetland and the five farms on Skye due to the long distance between the areas. With limited potential for increased volumes and challenging conditions for operational integration reducing ability to mitigate and control biological challenges, Grieg Seafood does not see potential to maintain operations with the fish welfare and production cost standard that it has for the rest of the company under the current structural set-up.

CEO of Grieg Seafood ASA, Andreas Kvame, said:

“In this area, it has proven difficult to maintain the fish welfare and production standard we have in the rest of the company, due to the long distance and weak operational synergies between our main operations in Shetland and the five farms in Skye. Therefore, we see no other choice but to liquidate our operations in Skye, as we look for alternatives for the sites outside the company. Our staff in Skye has done a tremendous job despite less than optimal conditions, and I want to thank them for their hard work and dedication to Grieg Seafood.”

The biological challenges experienced during the July-September period caused an unfortunate mortality event, due to abnormal levels of jellyfish, where 627 000 individual fish or 1 500 tonnes were lost. Operations at the impacted sites will be discontinued immediately, while operations at the two remaining sites will be shut down after harvest in Q4 2020 – Q1 2021.

Grieg Seafood’s main operations in Scotland, on the Shetland isles, has had a good and stable biology so far during the quarter and Grieg Seafood’s guiding of 95 000 tonnes harvest in 2020 remains.

Grieg Seafood aims to build a platform for continued sustainable growth and cost improvements. With an ambition for global growth, Grieg Seafood aims to strengthen its market position, while driving increased value creation as a global supplier of sustainably farmed salmon. The strategy for 2020-2025 is founded in an ambition for sustainable salmon farming and comprises three key strategic objectives for continued growth and business development: Global growth, cost leadership and value chain repositioning. Sustainability in remains a foundation of the strategy.

For further enquiries, please contact:
Andreas Kvame, CEO
+47 907 71 441 / andreas.kvame@griegseafood.com
(mailto:andreas.kvame@griegseafood.com)

Atle Harald Sandtorv, CFO
+47 908 45 252 / atle.harald.sandtorv@griegseafood.com

For media enquiries, please contact:
Kristina Furnes, Global Communications Manager
+47 48185505 / kristina.furnes@griegseafood.com

About Grieg Seafood
Grieg Seafood ASA is one of the world’s leading salmon farmers, targeting 95 000 tonnes of harvest (GWT) in 2020. Our farms are in Finnmark and Rogaland in Norway, British Columbia and Newfoundland in Canada, and Shetland in the UK. Our headquarter is located in Bergen, Norway. Grieg Seafood ASA was listed at the Oslo Stock Exchange in June 2007. More than 900 people are employed by the Company globally.

Sustainable farming practices are the foundation of Grieg Seafood’s operations. The lowest possible environmental impact and the best possible fish welfare drive economic profitability. Towards 2025, we aim for global growth, cost leadership in each region and to evolve from a pure salmon supplier to an innovation partner for selected customers.

To learn more, please visit www.griegseafood.com.