Grieg Seafood notched up a problematic third quarter with numerous biological problems ratcheting up costs and reducing year-on-year earnings.

Operational earnings before interest and tax for the group were down 3 percent to NOK 145 million (€14.1 million/$14.5 million) in the third quarter.

This was despite a 12 percent higher harvest volume of 22,923 metric tons and a 31 percent revenue increase to NOK 1.7 billion (€166 million/$170 million).

"While the market and demand for salmon was strong for the season, the third quarter has been somewhat challenging," said Grieg Seafood CEO Andreas Kvame.

Results in Rogaland and Finnmark in Norway were positively impacted by a high share of superior fish, but this was partly offset by contracts, timing of harvest and lower average harvest weight in Finnmark.

Production in the quarter was hampered by unfavorable biological conditions in both regions, which will impact full year 2022 harvest volumes.

The Spiro parasite was detected at some farms in Finnmark, where fish have recently been released to sea.

The parasite has limited impact on fish welfare and biological performance for most fish, however, fish with sickness signs will be culled, said the group.

The source of the parasite is believed to be water intake at a freshwater facility during a limited period of time, and correcting measures have been initiated. The incident is expected to have limited impact on
future harvest volume as actions are taken to compensate the shortfall by transferring more smolt to sea and optimization of sites.

Results in British Columbia, Canada, were negative during the quarter, with higher costs driven by reduced survival. The lower survival in seawater is mainly due to algae blooms on selected sites where Grieg's barrier system was not yet implemented.

Production at remaining sites were good. As part of the strategy to improve biological control, the company is in process of installing algae mitigation barrier systems at exposed sites in the region.

Grieg has taken action to improve the site structure in BC, phasing out old sites with challenging biology and high cost.

The management team is strengthened with a new COO for North America and managing director for BC.

In Newfoundland, fish released to sea is performing well and according to plan. So far, 2 million smolt have been released, currently with an average weight of 1 kilo. First harvest is expected late 2023.

Kvame also commented on the recent 40 percent government tax proposal, stating that "political risk in Norway increased significantly" and that all previously identified large investments in Norway's coastal communities by the group were now on hold.

'The proposal and the uncertainty caused by the political process in which it was launched shows how geographical diversification has become even more important to reduce risk in the industry," said Kvame.

'Grieg Seafood is together with the industry working to ensure that Norway remains competitive within the global salmon farming industry, with a stable and attractive investment climate. The proposal is subject to a public hearing and adoption by the Parliament. Once that has happened, Grieg Seafood will assess how the final outcome will impact our strategy and plans and adjust accordingly."