(Bloomberg) -- Norwegian salmon farmers saw their second quarter profits drop as consumers hit by the higher cost of living bought less pink fish and health issues hurt yields.
Grieg Seafood ASA shares slid as much as 16% in Oslo, their biggest drop since 2022. Mowi ASA, the world’s biggest salmon grower, gained about 1% and Leroy Seafood Group ASA 3.8% after declines of more than 2% for both stocks on Tuesday following SalMar ASA’s lack-luster report.
Mowi said earnings were held back by lower demand in the US and high raw material prices in Europe, posting a 24% decline on earnings before interest and taxes from a year earlier. Competitor Grieg reported a loss, while Leroy operating Ebit fell more than estimated. All three reported harvest volumes in advance of earnings for the quarter.
Salmon farmers are still struggling with the knock-on effects of winter sores and string jellyfish in Norway from earlier in the year. That’s forced producers to export more fillets at a lower price than what they would get for their superior whole fish.
Grieg’s operations in British Columbia, Canada, were severely impacted by low dissolved oxygen in the water, causing higher death rates, loss of feeding days and reduced growth. Earnings from its farms in Finnmark, Norway’s northernmost region, were hit by low average harvest weight and high costs due to earlier problems with the Spiro parasite and string jellyfish.
Analysts will likely make “massive negative earnings revisions to short-term earnings” for Grieg, Pareto Securities analysts Sander Lie and Oda Djupvik said in a note.
Norway’s seafood exports slumped by a record in June, falling by more than 2 billion kroner ($190 million). The Nordic nation makes up more than half of global farmed supply, benefiting from favorable conditions along its fjords and coastline that are difficult to replicate elsewhere.
Industry heavyweight Mowi aims to expand its annual harvest to 500,000 metric tons this year, from 475,000 metric tons in 2023. Mowi said on Wednesday that it wants to continue to grow faster than the wider industry by reducing the amount of time smaller fish spend in the sea to minimize health issues. The US market is expected to gradually improve as Western economies continue to recover, it said.
(Updates with comment from analyst in 6th paragraph.)
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