Norwegian aquaculture and fisheries giant Leroy Seafood posted increased earnings across its aquaculture and fisheries operations, but results were overshadowed by the threat of a new 40 percent tax on its salmon operations.

The group posted a 31 percent year-on-year increase in earnings before interest, tax, depreciation and amortization to NOK1.2 billion (€116 million/$121 million). Its revenue rose 18 percent to NOK 7.4 billion (€716 million/$745 million).

Leroy's farming segment delivered improved results in the quarter, with salmon prices still trending higher, but full potential was stemmed by inflationary pressure on costs. Accordingly, harvest volumes have been reduced by 5,000 metric tons for 2022.

Results for Leroy's wild-catch segment also improved, driven by high prices and higher catch volumes. But higher bunkering charges are affecting costs.

Earnings in Leroy's value-added segment were negatively impacted by the extreme hike in salmon prices.

As with other Norwegian salmon company CEOs, Leroy's is dwelling on the proposed new salmon farming tax.

The company said the proposal is already having severely negative impacts on its day-to-day operations, and will have serious long-term consequences for Leroy and the industry.

"Norway has a long tradition of open processes when material changes are to be made to an industry's framework conditions, including ensuring that concerns raised by businesses are heard and understood.

"The proposal of 28 September breaks with this tradition. It lacks adequate insight into the industry's dynamic, represents a breach of trust and is causing great uncertainty," said the company.

"The consequences are extremely serious for Leroy and our employees, and we expect implementation of
the proposal to be delayed to allow time for a thorough consultative process, followed by discussion and broad compromise in the Storting," said CEO Henning Beltestad.

Earlier this month, Leroy sent out redundancy notices to 339 employees at four of Leroy Seafood Group's processing operations, blaming the layoffs on the tax hike that its says prevents it and other salmon farming companies from entering into long-term sales contracts with customers.

The potential redundancies take effect from Jan. 1.