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Leliacevic Group’s recent Q2 2025 earnings call highlighted significant operational growth, despite challenges in market pricing. The company reported an operational EBIT of NOK 680 million, a substantial increase from NOK 96 million in the same quarter last year. The stock price of Leroy Seafood Group ASA, a related entity, showed a positive movement with a 1.78% increase, reflecting a favorable investor sentiment. According to InvestingPro data, the stock has delivered impressive returns, with a YTD gain of ~95% and a remarkable one-year return of ~104%, significantly outperforming broader market indices.
Key Takeaways
- Operational EBIT surged to NOK 680 million from NOK 96 million year-over-year.
- New farming technologies and improved biological performance are key growth drivers.
- Harvest volumes increased significantly, contributing to revenue growth.
Company Performance
Leliacevic Group demonstrated robust performance in Q2 2025, with operational EBIT rising sharply to NOK 680 million from NOK 96 million in the previous year. The company’s strategic focus on innovation and technology in farming has bolstered its operational capabilities, allowing it to harvest approximately 49,000 tons compared to 36,000 tons last year. This improvement comes despite a challenging market environment with salmon and trout spot prices falling by 30 NOK.
Financial Highlights
- Operational EBIT: NOK 680 million, up from NOK 96 million last year
- EBITDA: NOK 1 billion
- Dividend: NOK 2.5 per share
- Net interest-bearing debt: Increased from NOK 7 billion to NOK 8.5 billion
Outlook & Guidance
Looking forward, Leliacevic Group aims to achieve a volume target of 200,000 tons, up from the current guidance of 195,000 tons. The company is optimistic about positive price developments into 2026, despite expectations of zero supply increase for the remainder of the year. With average daily trading volume of 0.16M shares over the past three months, investors seeking detailed analysis can access the comprehensive Pro Research Report available on InvestingPro, which provides expert insights into the company’s growth trajectory and market position. By 2030, the company targets a revenue of NOK 50 billion, supported by its fully integrated value chain and strategic global customer relationships.
Executive Commentary
CEO Henning Belzer emphasized the company’s commitment to creating "the world’s most efficient and sustainable value chain for seafood," highlighting its strategic initiatives in submerged and semi-coathane farming. CFO Shul Maun expressed pride in producing "the most sustainable food protein available," underlining the company’s focus on sustainability.
Risks and Challenges
- Market Pricing: Continued pressure from lower salmon and trout spot prices could affect profitability.
- Debt Levels: Rising net interest-bearing debt poses financial risk.
- Supply Constraints: Expectations of zero supply increase may limit growth opportunities.
Leliacevic Group’s strategic advancements and operational improvements underscore its resilience in a competitive market. As the company navigates market challenges, its focus remains on innovation and sustainable growth.
Full transcript - Leroy Seafood Group ASA (LSG) Q2 2025:
Henning Belzer, CEO, Leliacevic Group: Welcome to Leliacevic Group’s second quarter presentation 2025. My name is Henning Belzer. I’m CEO in the company. And with me today, I have Shul Maun, CFO. First of all, I will take you through the highlights in the quarter, and then Shul will take you through the key financial highlights, and, then I will come back and talk a little bit about the outlook going forward.
Our goal is to create the world’s most efficient and sustainable value chain for seafood, And we’re very proud of the value chain that we have developed, and this give us great opportunities going forward. Our fully integrated value chain is our competitive advantage. We mean that we deliver value for our customers, which are seeking sustainability, health, quality, traceability, stability, availability, and convenience. And our value position is speed and cost efficiency, reliability and trust, product and category innovation and traceability and quality assurance, and clear ESG commitments. Highlights of the quarter.
Strong biological performance, spot prices for salmon and trout well below last year, group contract share of 30%, supporting both farming and WAP sales and distribution. A record high earnings in VAP sales and distribution segment, low quotas in wildcatch offset by significant price increase and positive cost development in farming. And in the quarter, we paid out a dividend of NOK 2.5 per share paid in the quarter. And we have had operational EBIT of NOK $680,000,000 compared to NOK $9.00 6 same quarter last year. We are reporting in three segments, farming, wild catch, VAP sales, distribution, and we will go into some details of the quarter in the different segments.
And we start with farming highlights. And the spot prices for salmon is about 30 NOK lower compared to same quarter last year, which, of course, has affected us in this quarter. But we still have managed to to keep good good profit in in this segment with with especially in in with with some contract shares. Improvement in biology showing results. The highest net production in sea in in the second quarter, highest survival rate, higher superior share, higher average harvest rates, and declining costs.
So that’s on a positive side. The biological development in ’3 is a little bit more challenging following high sea water temperatures. And we keep our guidance of a 195,000 ton. Shield technology continued to show good results. And in this quarter, we harvested about 49,000 ton compared to 36,000 ton last year.
So a good increase in in volume. If we go into the different regions or companies, we start with Leroy and Nott, a very strong biological development, both in growth, survival rates, superior share, and continued high license utilization. We see a significant cost decrease compared to the quarter before and expect a slight decrease going forward into to versus expectation of a slight decrease, and the cost expected for third quarter is at the same level as second quarter. Also here, we see high seawater temperatures in in especially beginning of third quarter, but so far, the measures against sea lice appear to improve situation versus last year. And the estimated harvest volume is 50,000 ton.
The volume harvested in in second quarter is 11,000 ton 2025 compared to 5,000 ton in ’24. And the operational EBIT is 18.9 compared to 37 in second quarter twenty four. LeRomit, also a strong biological performance in in this quarter. Record net growth, high survival rates, continue high license utilization, and also we see improvement in superior share compared to same quarter in ’24. As expected, a quarter increase in in cost.
Also here, high seawater temperatures and a shelling since start of q three. Expect cost at the same level in in quarter on quarter in in third quarter. Estimated harvest volume is 75,000 ton. If we look at the the harvest volumes, it’s close to 17,000 ton compared to, yeah, about 16,000 ton last year. EBIT per kilo of 11.5 compared to 37.5 last year.
Lerichetrol, also here a strong biological improvement, record net growth, high survival rate, high superior share, and continued high license utilization. In this quarter, 47% of the volume is throat, where we had a realized throat price for a group of less two NOK lower than salmon in the quarter. It’s been a decrease in in cost compared to to first quarter, and and and we expect the the cost the same level. So that’s that’s a good thing. And and then we will see going forward.
We expect a cost increase compared to to second quarter. And also here, we we have some risk in when it comes to temperatures, the increase in July and August. Estimated harvest volume of 70,000 ton, twenty twenty five. Harvest volume, 21,000 ton compared to about 16,000 ton in second quarter last year, and a EBIT value chain of 9.7 compared to 13.5 last year. So so it’s a it’s a strong development in Lerichotl.
And if we also look at the the numbers in second quarter last year, we see there is also always only a small decrease, and we also and when it comes to the the the the price reduction, you know, this is a good good improvement in performance compared to to last year. Scottish Sea Farm. Strong biological development with next generation of fish performing very well. Low lower price return impact result in the in the quarter. The volume in 2025 is impacted by reorganizing site structure, long term potentials significantly higher, and the small input to see in h one twenty five of 6.5 compared to 3,500,000 in first half twenty four.
So great expectation for especially next year in Scottish sea farm. Estimated harvest this year is 32,000 ton. The harvested volume in the q two is 11,600 ton compared to 12,000 ton, last year. And, unfortunately, this, second quarter is a negative EBIT of minus 2.4 compared to 19.1, same quarter 2024. When it comes to farming and guiding, we keep our 195,000 ton guiding in Norway, 50,000 ton in 75,000 ton in and 70,000 ton in Lerushotol.
And our share of Scottish Sea Farm is 16,000 tons, so a total of 211,000 ton. Wild catch. I will say a good a good quarter and a good first half. The card quota is down 32%, impacting catch volumes for the trolling fleet and, of course, also the raw material price and volume in the in the land industry. I will say that, it’s done a great performance on both both sides handling the the the quota situation in a good way.
So a very good performance h one and with the EBIT 114,000,000 higher than first half twenty four. And we see the the key species, the prices. It’s it’s extremely high. Card prices close to 18 NOK. The head of prices is still very high, and the sale price sale prices is up to 30 NOK.
So yeah. If we look at the wild wild catch quarters and the catch volumes, we have the same volumes as second quarter last year, about close to 18,000 ton. But on a positive side, we see that the remaining quarter for 2025 is 3,000 ton higher, 17,000 ton this year compared to 14,000 ton last year, same period. Sales and processing. We have operation in 70 countries and sales to more than 80 markets.
It’s been here a record quarter, really good performance. Structural improvement continued to real to yield results. It’s a strong half with the first half with record twelve month rolling operation EBIT. Effects of and this is an effect of a structural improvement work, strong demand in end markets, positive development in emerging markets, and strong positioning with strategic customers globally. And also, new branch offices in in ACI starting to show results.
The expectation for continued positive profitability trend in 2025. So we are on on a good trend in this segment, and and we are really satisfied with the development and a positive for the future. Danjou will take you through the key financial highlights.
Shul Maun, CFO, Leliacevic Group: Yes. Thank you, Henning. So this quarter has seen excellent development in a lot of the factories we control ourselves, and then we are obviously impacted by a significant fall in spot prices for salmon and trout. Starting then with our profit and loss sheet, we can see the result this year compared to last year. Key drivers on the lateral lines.
So spot prices are down 30 kroner a kilo, So a full impact of that on on the close to 50,000,000 kilos of salmon and trout we harvested would mean a result drop of NOK 1,500,000,000.0. We are seeing a significantly lower fall in our operational EBIT and that’s also then highlighting the balanced business model we have. Looking at profitability on the salmon and trout, we are seeing good cost development. We are seeing good development in superior shares and excellent biological development. We are this also includes the profitability downstream, where we see high and increased activity, better capacity utilization, and an increased profitability.
Still with the significant fall in in spot price, we see that overall EBIT per kilo in that value chain is down from 27 kroner kilo to 12 and a half. But we are satisfied with the development in in the key operational KPIs in the quarter. Looking at the wild catch segment, we know quarters are down. We can see that the catch volumes are, relatively equal to last year. There are some timing effects when comparing this quarter to last year, but the core, impact if looking at numbers year to date this year compared to last year is that prices achievement is higher because price development has developed more positively than the quota reduction.
And year to date quota is down 114 now. Our operational EBIT year to date is up NOK 114,000,000, and we see that this quarter, the operational EBIT per kilo is up from basically NOK 0 last year to eight kilo. In sum, with these value drivers, we see operational EBIT is $680,000,000 compared to NOK $9.00 6,000,000 last year. And we see that we have a healthy revenue development, much helped by volumes, both upstream and downstream and offweight somewhat by lower prices on salmon and trout. Turning to our balance sheet.
The long term, non current asset we see is up close to 2,000,000,000. This is a reflection of CapEx, which I will return to in next slide, but includes, among others, new farming technology. And there’s also some leasing agreements on on right of use assets, which predominantly relates to new agreements on wellboats. If you look on the current asset, our standing biomass of fish is up from around basically a 100,000 tons last year to a 110,000 tons this year, and that is the driver for the increase in biological asset at cost. I would say we have good control on working capital and a healthy development on key working capital items, and we have a healthy and strong balance sheet, and we are investment grade rated and equity ratio of 49%.
Net interest bearing debt rose from, comparing with, from 7,000,000,000 to 8 and a half billion in this quarter, and the key driver for that is, the payment of dividend. Looking beyond that, and we saw that working capital was developing, relatively healthy, with small changes. We have EBITDA of NOK 1,000,000,000, and we see that CapEx has increased NOK 600,000,000. It’s fair to say that this debt level, net industry debt level, is a bit higher than what we expected it to be at this point of the year, and that is due to lower profitability in the farming side and lower salmon price than expected. But we believe we have a healthy balance sheet and a strong balance sheet.
On CapEx, we have not made any changes to this slide compared to previous quarter, and we expect to invest NOK 2,000,000,000. You can see the split. It’s maintenance and CapEx, smaller growth CapEx, which is in the area of 1,000,000,000. And then the core of our investment strategy and where we allocate capital is new technology in farming, and in particular, then in submerged farming, also on, smolts, also on lasers. And then in addition, we are investing in smolts, and Hanning will, highlight in a later slide when we expect to see the impact of these investments in operation, but we believe we already are seeing the impact of them in our numbers this ’25.
There is a discussion, particularly in Norway, on what are the ripple effects of our activity. So this slide is included to to highlight those. So, what we see here is in the, light blue lines, where we and Lele operate. And the dark blue, dots is where Lele has bought, from suppliers. And this is for 2024.
And what we can see is that there’s vast ripple effects in all of Norway, in particular in the coastline, In addition to our 6,000 employees, which is a global number and 4,000 employees in Norway, we have significant effects when it comes to creating jobs all along the coastline. And all of these, we are proud, to be part of producing, the most sustainable food protein that’s available, out there today. Value creation, estimated to 15,000,000,000 NOK and a substantial tax contribution. So with that turning, I give the word back to you.
Henning Belzer, CEO, Leliacevic Group: Okay. Then we’re gonna go for outlook. And, yeah, we have set some ambition targets, you know, in three back three years back. And I will say that we can start with the targets for volume, the 200,000 ton. We have a guiding, at a 195 now.
We were last year at 171,000 ton, and we believe that, you know, it’s it’s it’s achievable to get to 200,000 ton. So and we believe that it it will it will be positive possible, and and we we keep the direction towards the 200 even though we had a guidance of 195. The target for drop sales and distribution, it’s of course, it’s it’s a high target, but we see on a ton twelve months rolling. We are at close to the target end of end of second quarter. And we believe that we will also have a strong performance going forward, so this is within reach.
And and I think the whole segment are working extremely hard to achieve this goal. For the EBIT EBIT for farming to be number one, it’s a hard competition. It’s still five months left of the year, and and we will see end of the year where we where we end. But we strongly believe that we are in the right direction to to to achieve this also. And the thirty twenty thirty target is 50,000,050 billion NOK, and we also have the, you know, belief that we believe that this is within reach going forward the next five years.
But okay. VAP sales and distribution, yet another quarter of earnings record reaching for ambitions targets as I mentioned. And we see a strong improvement from the in the twelve months rolling from second quarter twenty four to ’25, and we will have a 18% increase in in in in EBIT up to to 1.25. And this is done through short term actions and long term action, and we really believe that we see structural improvement initiatives in all units in in in Europe. We see continued improvement in VAP VAP factories and expect through twenty twenty twenty five based in higher capacity utilization and increased operational efficiency.
And we work hard with also the long term actions. So but I have to say I’m really impressed by the job that is done in in in this segment and to see all the improvement and that we are going in the direction to achieve our goal. For the farming, as I said, we have have a target of 200,000 ton. We were at 171,000 ton last year, and we will increase by close to 30,000 ton. And how are we gonna do this?
It’s through a long term improvement program focusing on raw, smart production, and new technology. And this is showing where we are. You know, this improvement program started four or five years ago, focusing on improving genetics, row smolt shielding technology, and layaway implementation. And we see that, step by step, we see that this will give effect on harvested, volume. And we see now for second half of the year, we see that we take out benefits from this program at a higher level than first half twenty five.
So and I will come back to to some improvements afterwards. Yeah. And, yeah, like I said, there we see the improvement in the second quarter. It’s we see a strong biological performance in far farming. If we look at growth rate, we see that we increased 16% in second quarter compared to the the last five years.
For superior share, we see a 9% improvement. For mortality, 50% reduction. And biomass is 9% higher end of second quarter compared to the average of the last five years. So, yes, this strategy is showing, results and the improvements that has been done. And if we dive into the new technology and submerged technology, we see great results when it comes to lice treatment.
Traditional cages compared to submerged, it’s a reduction of seventy one percent, superior share plus three percent, and mortality is down for twenty four percent. So that’s good to see. And, shielding technology, we we are increasing share of harvest volume from shielding technology. Plan for ’25 is that, 35% share of total harvest volume from Chile technology in ’25. And it’s three different, technology, submerged farming, semi coathane farming, and laser delousing.
And then we need to, look at, you know, why, have we seen a decrease in prices, especially second second quarter of the year. And, we see that the main reason for that is the supply increase. And we see in July also, we had a 25 no. 21% increase in in supply. But the expectations for rest rest of the year is that it will be zero increase in supply compared to last year.
And we believe that we will see a positive price development going forward and also into 2026. And let’s hope that the low price level that we see in the last couple of months, it’s it’s it’s been the the bottom on the the price level that we’ve had. So on to summarize, farming, positive biological development in h two twenty five, while higher temperatures are shelling shellishing at the start of q three. Contract share for value chain in second quarter of 30% and for 2025 at around 25%, which will have a positive impact on both farming and web sales and distribution. Structural improvement initiatives expected to continue gradually, showing the result.
Spot prices and price realization quarter to date in in q three is below production cost and, of course, will impact profitability, but we need that we we we believe that there will be a positive price trend going forward. Wild catch, if we look into 2026, there will be a further reduction of 21%, HEDOC plus 18%, and SAIT down 15%, and SAIT South 24%. And BAP sales and distribution progressing towards profitability target in ’25 also support by contract positions, lower salmon and truck prices are building markets, increased demand for integrated sustainable value chain, and improved market share in some key markets utilizing the potential of our value chain. And then, please, you know, if we want to show you, this, this fantastic product, the trot, and and the presentation with this fantastic product and and which we really believe believe has a great future and Levoye produced about 40,000 ton of throat from Norway. Thank you very much.
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