Both Grieg Seafood and Norway Royal Salmon have reduced their 2014 harvesting forecasts and said they are set to take big write-offs due to problems with diseases and algal bloom at their farms.
And they are unlikely to be the only… ones. Leroy Seafood Group and Marine Harvest are also likely to report similar impacts from their operations in the south of Norway, noted Kolbjorn Giskeodegard, senior analyst with Nordea, on Aug. 19.
Grieg and NRS unveiled the costs in their second quarter reports, which saw earnings hit by lower spot salmon prices.
On Tuesday, Grieg revealed it would post losses of NOK 24 million in the third quarter of this year, largely due to outbreaks of pancreas disease at farms in Rogaland, Norway. In Canada, Grieg had to write off NOK 4m due to an algal bloom that killed 40,000 fish.
The following day, competitor NRS revealed it will write off up to NOK 31m in the third quarter of the year due to disease and algae issues.
The group believes it has lost some 650-750 metric tons of fish to a poisonous algal bloom at its Kokelv, Finnmark site in July. This will amount to a one-off cost of NOK 18- 22m, said NRS.
The fish had an average weight of 2.4 kg and was scheduled to be harvested in the fourth quarter of 2014 and first quarter 2015. “This incident is expected to result in reduced harvest in this period of 700t, compared to previous estimates,” the firm said.
In the south of the country NRS also experienced extraordinary mortality at its Andal site, Hordaland, in July. Some 300t of biomass died as a result of pancreas disease. The fish had an average weight of 4.0 kg and were scheduled to be harvested in August 2014.
Harvest for this site was accelerated and the remaining fish at the site were brought out before early August. Extraordinary mortality, accelerated harvesting and lost growth as a result of these incidents means that the estimated volume for 2014 in region south decreased by 700t compared to previous estimates, said NRS.
The incident is expected to incur a one-off charge in the third quarter of 2014 of approximately NOK 9m.
Grieg Seafood too has reduced its 2014 volume forecast and warned of losses ahead, as one analyst said the Russian ban and lower salmon prices made for a grim short-term outlook for the company.
NRS’ estimated harvesting volume for 2014 has been reduced as a result of the heavy losses it sustained in Q2, by 1,400t compared to earlier estimates. The new estimate is 27,600t, an increase of 10% on 2013.
Planned smolt release in 2014 is 8.7 million smolts, which is 14% higher than last
year and provides a basis for further growth in harvesting volumes in the coming year, the firm said.
Grieg has reduced its expected harvest volume for 2014 by 2% or 1,500 metric tons to 67,500t due to its struggles with PD, and is expected to post losses of NOK 24 million in the quarter ending Sept. 30 for the same reason.
View original article at: After Grieg, NRS cuts forecasts, takes multi-million hits from algal bloom, pancreas disease