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THE Norwegian Leyroy Seafood group has announced a big increase in second quarter turnover and profits, almost certainly helped by the surge in salmon prices. Turnover was up from 1,823-million Norwegian kroners in 2009 (£188-million sterling) to 2,176-million kroners (about £224-million sterling).
The Leryob board said it was very satisfied with the Group's development and with the result achieved for the period, which is the highest result achieved in the history of the Group to date.
The operating profit before fair value adjustment of biomass was 367.8 million kroners (£37.8 million) in the second quarter of 2010, compared with 221.6 million kroners £22-million) in the second quarter of the previous year. The strong increase in operating profit compared with the same period last year is as high as 66. per cent. This is explained by volume growth and improved prices for the Group's main products, Atlantic salmon and salmon trout, and an extremely good development for the Sales and Distribution business segment.
The company said: "As a result of the Group's long-term industrial market strategy, the prices achieved for salmon and salmon trout will naturally deviate from the spot market prices. Realised contract prices have been lower than prevailing spot prices in the quarter under review. At the beginning of 2010, the Group's share of contracts was higher than at the same point in 2009, and will vary between 40 per cent and 50 per cent throughout the year. Taken into consideration with the Group's positive market outlook, this indicates that the Group can also expect to achieve good prices in the time ahead. Despite improvements in all farming regions, there continue to be considerable regional differences within the Group in terms of production costs.
On the back of increased volumes and improved production for the Group as a whole, the Board of Directors anticipates falling production costs in the second half year of 2010 compared with the first half year of 2010.
Thanks to good market conditions, satisfactory biology and high volumes, the affiliated company Norskott Havbruk (owner of the Scotland-based Scottish Sea Farms Ltd) saw an extremely good development in net earnings in the second quarter.
Should fisheries be closed during breeding time to allow stocks to reach more sustainable levels?
