‘The consequences are extremely serious’: Earnings rise for seafood giant Leroy but looming salmon tax dominates projections

Norwegian aquaculture and fisheries large Leroy Seafood posted elevated earnings throughout its aquaculture and fisheries operations, however outcomes had been overshadowed by the specter of a brand new 40 % tax on its salmon.

The group posted a 31 % year-on-year enhance in earnings earlier than curiosity, tax, depreciation and amortization to NOK1.2 billion (€116 million/$121 million). Its income rose 18 % to NOK 7.4 billion (€716 million/$745 million).

Leroy’s farming phase delivered improved leads to the quarter, with salmon costs nonetheless trending increased and harvest volumes on a par, however full potential was stemmed by inflationary stress on prices. Accordingly, harvest volumes have been lowered by 5,000 metric tons for 2022.

Outcomes for Leroy’s wild catch phase additionally improved pushed by excessive costs and better catch volumes. However increased bunkering expenses are affecting value developments.

In the meantime, earnings in Leroy’s worth added manufacturing, gross sales & distribution phase had been negatively impacted by the intense hike in salmon costs.

As with different Norwegian salmon firm CEOs, Leroy’s is dwelling on the proposed new salmon farming tax.

With its totally built-in worth chain, Leroy sees important weaknesses within the proposal, which reveals an absence of perception into the business’s advanced worth chain, it mentioned.

The corporate mentioned the proposal is already having a severely adverse impacts on its day-to-day operations, and could have severe long-term penalties for Leroy and the business.

“Norway has an extended custom of open processes when materials modifications are to be made to an business’s framework situations, together with guaranteeing that issues raised by companies are heard and understood.

“Open processes assure predictability, stability, belief and, not least, a information and understanding
of the business affected. The proposal of 28 September breaks with this custom. It lacks enough perception into the business’s dynamic, represents a breach of belief and is inflicting nice uncertainty,” mentioned the corporate.

“The results are extraordinarily severe for Leroy and our workers, and we anticipate implementation of
the proposal to be delayed to permit time for an intensive consultative course of, adopted by dialogue and broad compromise within the Storting,” mentioned CEO Henning Beltestad.

Earlier this month Leroy despatched out redundancy notices to 339 workers at 4 of Leroy Seafood Group’s processing operations.

The corporate is blaming the layoffs on the disruption being brought on by a proposed Norwegian tax hike that its says prevents it and different salmon farming firms from getting into into long-term gross sales contracts with prospects.

The potential redundancies take impact from Jan. 1.