Grieg Seafood’s Earnings Call: Achievements and Challenges

Grieg Seafood ASA ((NO:GSF)) has held its Q3 earnings call. Read on for the main highlights of the call.

Grieg Seafood’s recent earnings call painted a mixed picture, showcasing both significant achievements and ongoing challenges. The company celebrated regulatory clearances and cost reductions, yet faced high farming costs and a negative operational EBIT. While the strategic focus on operational excellence and restructuring is promising, current financial metrics highlight areas needing attention.

Regulatory Clearance Achieved

Grieg Seafood has successfully obtained full regulatory clearance for its operations in the U.S. and Norway, with progress in Canada expected to conclude by the fourth quarter. This milestone marks a significant step forward in the company’s international expansion efforts.

Cost Reductions and Restructuring

The company has implemented significant cost reductions, including a 55% reduction in staff across sales and shared services. Additionally, Grieg Seafood has postponed NOK 110 million in 2025 CapEx, reflecting its commitment to financial prudence.

Strong Freshwater Results

Despite challenges faced at sea, Grieg Seafood’s freshwater facilities, including joint ventures, have delivered solid production results. This resilience in freshwater operations underscores the company’s diversified operational strength.

Operational Excellence Strategy

Grieg Seafood has defined a new operating model focused on operational capabilities centered in Rogaland. This strategy aims to prioritize profitability over growth, signaling a shift towards sustainable financial performance.

Strong Contract Position

The company has maintained a high share of contracts, which has helped mitigate the impact of lower market prices and volumes. This strong contract position is a key factor in stabilizing revenue streams.

Value-added Processing Expansion

A new facility at Gardermoen is set to ramp up to a 10,000-tonne capacity, with production commencing in early January. This expansion is expected to enhance Grieg Seafood’s processing capabilities and add value to its product offerings.

Challenging Sea Environment

High water temperatures and sea lice pressure have led to increased mortality and lower growth in sea operations. These environmental challenges continue to impact the company’s overall performance.

High Farming Costs

Farming costs have been notably high at NOK 70.4 per kilo, primarily due to the harvesting of smaller fish and biomass write-downs. This has been a significant factor in the company’s financial challenges.

Negative Operational EBIT

Grieg Seafood reported a negative operational EBIT of NOK 1 million, heavily influenced by transitional cost increases. This highlights the financial pressures the company is currently navigating.

Significant Cash Flow Challenges

The company faced a negative net cash flow from operations amounting to NOK 304 million, exacerbated by significant biomass buildup. This cash flow challenge is a critical area of concern for the company’s financial health.

Increased Net Interest-bearing Debt

Net interest-bearing debt increased by over NOK 700 million, partly due to financing discontinued operations. Managing this debt level will be crucial for the company’s future financial stability.

Forward-looking Guidance

Looking ahead, Grieg Seafood has reported a harvest volume of nearly 7,000 tonnes for continued operations in the third quarter of 2025. Despite high farming costs, the company achieved an operational EBIT of NOK 21.7 million in Rogaland. They forecast a cost decrease for Q4, though still above the long-term target. The company plans a NOK 4 billion dividend distribution post-annual accounts and is focusing on strengthening operations in Rogaland, enhancing profitability, and optimizing MAB.

In summary, Grieg Seafood’s earnings call reflects a company in transition, balancing significant achievements with ongoing challenges. While regulatory clearances and cost reductions are promising, high farming costs and negative financial metrics require attention. The company’s strategic focus on operational excellence and restructuring offers a pathway to improved profitability.