Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Leroy Seafood Group ASA (LYSFF) reported a record earnings in the web sales and distribution segment on a 12-month rolling basis.

• The company has seen strong biological improvements in Scottish Sea Farms, contributing to increased earnings.

• There is a significant increase in harvest volume and profitability at Scottish Sea Farms, indicating a successful turnaround.

• Leroy Seafood Group ASA (LYSFF) has invested heavily in sales and processing operations across 14 countries, leading to higher profitability.

• The company is on track to achieve its target of 200,000 tons of salmon and trout harvest by 2025, with promising biological developments and new technology implementations.

Negative Points

• The quarter experienced weak price development for salmon and trout, impacting overall earnings.

• High sea lice pressure and increased treatment costs have negatively affected the company's cost structure, particularly in the north and mid regions.

• The wild catch segment faces challenges due to reduced quotas, leading to lower catch volumes and profitability.

• The company reported a decrease in EBIT to 412 million NOK from 631 million NOK in the same quarter last year, primarily due to lower prices.

• Higher feed costs have driven up year-on-year expenses, impacting margins in the salmon and trout segments.

Q & A Highlights

• Warning! GuruFocus has detected 8 Warning Signs with LYSFF.

Q: Can you elaborate on the challenges faced in the third quarter regarding salmon and trout prices? A: (CEO) The third quarter experienced weak price development for salmon and trout, primarily due to challenging biological conditions and high sea lice pressure. However, we are seeing improvements in biology and earnings, particularly at Scottish Sea Farms, and expect better performance in the fourth quarter.

Q: What are the expectations for harvest volumes in 2025? A: (CEO) We have guided a harvest volume of 211,000 tons for 2025, including our share from Scottish Sea Farm. This is an increase from 2024, and we are optimistic about reaching our target of 200,000 tons of salmon and trout harvest.

Q: How is the company addressing the high sea lice pressure? A: (CEO) We are testing submerged technology, which has shown evidence of reducing the number of treatments required. This technology is part of our strategy to improve biological conditions and reduce costs.

Q: Could you provide more details on the financial performance of the sales and distribution segment? A: (CFO) The sales and distribution segment has shown continued positive development, with higher profitability compared to the third quarter of 2023. This is driven by operational improvements and better capacity utilization. We expect this trend to continue into the fourth quarter and 2025.