Grieg Seafood ASA Capital Markets Update: 2020 volume target reaffirmed, ensuring a platform for sustainable growth
05 Settembre 2018 - 6:00AM
Grieg Seafood is hosting a Capital Markets Update
in Oslo, Norway today 5 September 2018 under the headline "A salmon
farming pioneer entering the digital era".
Grieg Seafood represents 25 years of salmon
farming. While the company's harvest volumes have remained stable
for a period of time, revenues have grown substantially in recent
years driven by higher salmon prices. This has also led to improved
profitability. Looking ahead, Grieg Seafood plans to grow harvest
volumes substantially and continuously improve the sustainability
of operations.
The company today confirmed its growth ambitions
with a target of annual harvest volume of 100 000 tonnes in
2020 with cost at or below industry average. Furthermore, that the
company is building a platform for further sustainable growth
beyond 2020.
Grieg Seafood's operational and
financial targets presented at the capital markets update today
are:
-
Harvest volume of 100 000
tonnes in 2020: Increasing harvest volumes to 100 000
tonnes in 2020, mainly through improving utilization of current
capacity.
-
Cost at or below industry
average in 2020: Aiming for a production cost in line with or
below weighted industry average, targeting NOK 37.90/kg by 2020.
Reduction mainly driven by better operational efficiency from
higher volumes and improved biology.
-
NIBD to EBITDA ratio below
4.5: Balancing the Groups net interest-bearing debt with level
of earnings before interest and depreciations, not exceeding a
ratio of 4.5 times.
-
Equity ratio above 35%: At
any given time, the Group shall have a level of equity which is
appropriate in relation to the Group's cyclical activities. The
Board requires that equity consistently stay in accordance with
current loan terms, as a minimum.
-
NIBD/harvest volume of NOK
20/kg: Balancing the Company's debt levels with harvest
volumes, aiming for a net interest-bearing debt of NOK 20 per kilo
fish harvested.
-
Return on capital employed
(ROCE) of 12%: Requirement of a minimum of 12% return on
capital employed for all investment decisions.
-
Dividend policy to distribute
25%-35% of the Group's net profit after tax adjusted for fair value
appraisals: The Group's objective is to give the shareholders a
competitive return on invested capital through dividend payments
and value appreciation of the share, which is at least at the same
level as other companies with comparable risk. The future dividend
will depend on the Group's future earnings, financial situation and
cash flow. The Board believes that the dividend paid should develop
in pace with the growth of the Group's profits, while at the same
time ensuring that equity is at a healthy and optimal level and
that there are adequate financial resources to prepare the way for
future growth and investment and taking into account the wish to
minimize capital costs. The Board believes it is natural that the
average dividend, over a period of several years, should correspond
to 25-35% pre-tax profit, adjusted for the accounting effect of
fair value adjustment of biological assets.
Furthermore, it is reasonable that the company's
net interest-bearing debt per harvested kg at NOK 20. Based on
this, the size of the dividend could be corrected both up and down
according to the 25-35% share of profit after tax.
Grieg Seafood's strategic focus
areas to achieve its targets and ensure sustainable growth
are:
-
Sustainability: Grieg
Seafood wants to actively ensure sustainable food production in the
ocean and invest its resources accordingly. Healthy fish, clean
seas and economic profit are not regarded as contradictions. The
company's sustainability strategy is based on five pillars;
sustainable value chain, profitable growth and innovation, good
jobs for everyone, sustainable faming and productive oceans, and
local value creation.
-
Post smolt strategy:
Through investments in post-smolt production, Grieg Seafood aims to
improve biology, increase productivity and reduce cost. The main
effect from larger smolt is increased robustness and shorter time
to reach harvest size. The combination of stronger fish and reduced
exposure to biological risk, will improve biology and increase
survival rates.
-
Digital salmon farming: By
applying advanced sensor systems, big data, artificial intelligence
and automation, Grieg Seafood aims to generate actionable insights
to increase yield and resource efficiency.
-
Biosecurity and fish
welfare: Biosecurity and fish welfare is vital to secure
sustainable growth and high harvest quality. Grieg Seafood aims to
secure strong biological performance through implementation of a
broad range of technological and operational initiatives, including
post smolt strategy, GSF Precision Farming and preventive measures
to prevent sea lice and algae issues.
-
Expansion opportunities:
Expansion to secure fulfillment of Grieg Seafood's goal of
harvesting 100 000 tonnes in 2020 will mainly come from
improved utilization of existing capacity, driven by post-smolt
strategy, digital salmon farming and improved biosecurity and fish
welfare. To secure sustainable growth longer term, additional
opportunities will be pursued, including acquiring new capacity,
acquisitions and joint ventures and development of new
concepts.
Commenting on Grieg Seafood's
capital markets update, Andreas Kvame, CEO, said:
"Our objective is to ensure sustainable growth in
the years ahead by combining great people, nature and technology.
We believe salmon will be an increasingly important food source
globally, and that Grieg Seafood will be able to create value for
multiple stakeholders, including the communities in which we
operate, our employees and shareholders, while we provide salmon to
the world."
Presentation and lunch
The Astrup Fearnley Museum Strandpromenaden 2,
0252 Oslo Norway
Registration at the event from 08:30 CEST and presentations from
09:00 - 13:00 CEST.
Lunch will be served from 13:00 CEST.
Break-out sessions from 13:30 CEST.
Webcast
A live webcast of the presentations will be made
available on our website:
https://www.griegseafood.no/inverstors/webcast-2/
Materials
The presentations held at the Capital Markets
Update event will be available on the company's website
www.griegseafood.no.
For further information, please
contact:
Andreas Kvame, CEO, tel: +47 907 71 441
Atle Harald Sandtorv, CFO, tel: +47 908 45 252
About Grieg Seafood
Grieg Seafood ASA is one of the world's leading
fish farming companies, specializing in Atlantic salmon. The
company has an annual production capacity of around 100.000 tonnes
gutted weight.
The Group is today present in Norway, British
Columbia (Canada) and in Shetland (UK), employing approximately 700
people. Grieg Seafood ASA was listed at the Oslo Stock Exchange
OSEBX) in June 2007. Our headquarters are located in Bergen,
Norway. The business development of Grieg Seafood ASA focuses on
profitable growth, sustainable use of resources and being the
preferred supplier to selected customers. To learn more, visit
www.griegseafood.no
This information is subject to
the disclosure requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.
180905_GSF_CMU
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information contained therein.
Source: Grieg Seafood ASA via Globenewswire
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