Leroy reports jump in Q3 profits

Leroy reports jump in Q3 profits

Lerøy Seafood, the Norway-based seafood processor, has reported "record" third-quarter sales and profits.

The company posted profit of NOK370.1m (US$43.8m), a rise of 62.1% on the third quarter of 2015. It generated an operating profit before fair value adjustment of biomass of NOK481m for the third quarter, a jump of over 90% compared to the corresponding period a year earlier.

The business booked third-quarter revenue of NOK4.27bn, up 29.5% on the same period in 2015.

"We are delighted with such a great result. It has not been an easy quarter. We have experienced a number of biological challenges and recorded lower average weights than expected and higher costs than normal," CEO Henning Beltestad said.

"With a positive market, the group chose to harvest a substantial volume of fish throughout Q2 2016, entering the third quarter with 10% less biomass than in the same period in 2015. As a result, the group has had much more flexibility in terms of the timing of release from stock throughout the quarter. Based on the group's market analyses, a somewhat limited volume has been harvested in the quarter, and the group has focused on accumulating biomass. This strategy to harvest a lower volume in the quarter, combined with the higher contract share in the quarter, has resulted in lower prices realised. The group expects higher harvested volumes, prices realised to improve significantly, and lower release from stock costs in the present quarter."

In the third quarter, Lerøy Seafood became the majority shareholder in two fellow Norwegian seafood businesses, Havfisk and Norway Seafoods Group. Both companies were consolidated in Lerøy Seafood from 1 September. Lerøy Seafood said they had "made a positive contribution" to the group's operating profit before biomass adjustment of NOK12.6m.

Lerøy Seafood has seen revenues and profits grow in the first nine months of the year. Profit stood at NOK1.44bn, up from NOK354.3m in the first nine months of 2015. Operating profit before fair value adjustment of biomass was NOK1.83bn, against NOK1.03bn a year earlier. Revenue stood at NOK12.34bn, up from NOK9.89bn in the first nine months of 2015.