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LiraCivic Group reported strong financial results for the first quarter of 2025, demonstrating significant improvements in operational efficiency and technological advancements. The company achieved an operational EBIT of NOK 1.049 billion, marking a robust performance. LiraCivic’s stock, listed under a different ticker, showed an upward trend, reflecting investor confidence in its strategic direction.
Key Takeaways
- LiraCivic Group achieved an operational EBIT of NOK 1.049 billion in Q1 2025.
- The company reduced its net interest-bearing debt by NOK 700 million.
- Technological advancements led to a 75% reduction in lice treatment and an 8% increase in average harvest rate.
- LiraCivic expanded its presence in Asia with new offices in South Korea, Vietnam, and Thailand.
- The global salmon supply is expected to grow by 6.4% in 2025.
Company Performance
LiraCivic Group demonstrated a strong performance in Q1 2025, with significant operational improvements and technological innovations. The company has focused on enhancing its farming technologies, leading to substantial gains in efficiency and sustainability. With operations in 70 countries and sales in 80 markets, LiraCivic is solidifying its position as a leader in the seafood industry. The company’s integrated value chain continues to be a key competitive advantage, as highlighted by its executives.
Financial Highlights
- Operational EBIT: NOK 1.049 billion
- Return on Capital Employed: ~15%
- Net Interest-Bearing Debt: Reduced by NOK 700 million
- Total Assets: ~NOK 40 billion
- Equity Ratio: Just above 50%
Outlook & Guidance
LiraCivic Group is targeting a harvest volume of 200,000 tonnes, up from the current 195,000 tonnes. The company is also aiming for an EBIT target of NOK 1.25 billion in its VAPS Sales and Distribution segment. Continued focus on operational efficiency and technological improvements is expected to drive future growth.
Executive Commentary
Henning Belstad, CEO, highlighted the company’s commitment to creating the world’s most efficient and sustainable value chain for seafood. He emphasized the fully integrated value chain as a critical competitive advantage. Schul Mann, CFO, expressed satisfaction with the quarterly figures, noting that the improvements are beginning to reflect in the financial results.
Risks and Challenges
- Supply Chain Issues: Potential disruptions could impact operations and profitability.
- Market Saturation: Increasing competition in global markets may pressure margins.
- Macroeconomic Pressures: Economic fluctuations could affect consumer demand and pricing.
- Regulatory Changes: New regulations in key markets could pose compliance challenges.
- Environmental Concerns: Sustainability issues remain a critical focus area for the industry.
LiraCivic Group’s strategic initiatives and operational improvements position it well for continued success in the evolving seafood market.
Full transcript - Leroy Seafood Group ASA (LSG) Q1 2025:
Henning Belstad, CEO, LiraCivic Group: Welcome to LiraCivic Group’s first quarter presentation twenty twenty five. My name is Henning Belstad, and I’m the CEO of Leroy Sifu Group. And with me today, I have Schul Mann, CFO, which will take us through the key financial numbers. First of all, I will take you through the highlights, and then Shiel will take us through the key financial highlights, and then I will come back and talk about outlook going forward and to indicate what we believe about the future. First of all, Lira is creating the world’s most efficient and sustainable value chain for seafood.
That is our task every day we go to work. Our fully integrated value chain is our competitive advantage, and we really see that today with increased supply that this is a good advantage for us when the volume is getting bigger. So our customer is seeking sustainability and health, quality, traceability, stability and availability and convenience. And we believe that our value prediction can give that in speed and cost efficiency, reliability and trust, product category innovation and traceability and quality assurance and clear ESG commitments. So our fully integrated is a perfect match for our key customers.
And then about the highlights of the quarter. We have had a strong biological performance starting to show results. Spot prices for salmon and trout well below last year. Record earnings in the VAPSSALES and DISTRIBUTIONS segment, twelve months rolling. Low quotas in our wild catch, offset by significant price increase.
Positive cost development in farming and expect to continue in 2025. And the Board has proposed a dividend of NOK 2.5 per share. End of quarter, the operational EBIT of the quarter is 1,049,000,000.000, which is a good performance compared to first quarter twenty twenty four. Leroy is reporting in three segments: farming, wildcatch, up sales and distribution. And we start with the farming highlights this quarter.
This has been a quarter where spot benchmark prices is about 90 lower compared to first quarter twenty twenty four. We have seen clear improvement in biology, starting to show in our harvest result. We have seen the highest net production in sea in the first quarter ever, reduced mortality, declining cost and higher superior share. And we see positive biological development quarter to date in second quarter twenty twenty five, encouraging for cost and volume development in 2025. And Sheeling technology is showing good results.
If we go into the different regions and the companies, we see Lererraur. We have had a strong biological development, a record net growth in the first quarter, high survival rate, continued high license utilization. Quarter on quarter cost decrease and a lower cost expected quarter on quarter in second quarter twenty twenty five And also expect lower costs in 2025 compared to 2024 and keep our estimated volume of 50,000 tonnes. So clearly, a good performance in the quarter and also good expectations for further improvement going forward, even though good results behind us. And if we look at the harvest volume, it’s about 7,000 tonnes compared to 6,000 tonnes last year and average weight of four kilo compared to 4.6 kilo last year and EBIT all inclusive of about NOK 30 in the quarter compared to NOK 44 same quarter last year.
Then we have a mid region, Leremet. Also here, strong biological performance, record net growth also in this region in the quarter, high survival rates, continued high license utilization. And we see continued positive results from shielding technology and the decrease in cost on good biological development and expect slight higher cost into second quarter twenty twenty five. And the estimated harvest volume is kept at 75,000 tonnes. In total, in the quarter, we harvested 16,000 tonnes compared to about 13,700 tonnes in the same quarter last year and also higher average rates with NOK 4 point 4 kilo compared to NOK 4 point 1 kilo.
And operational EBIT value chain of 32, which is about the same level as first quarter twenty twenty four. And then Leroy Chetrol, South region, Southwest region. We’re really glad to see the improvements in this region. So significant increase in growth rates, high survival rates and higher license utilization into 2025. And the biological improvement is showing in the results.
Costs down quarter on quarter, expect costs at same level in second quarter, but then you use a significant potential for cost reduction in 2025 as a whole. So we are really glad to see the development in La Recheotron. And the estimated harvest volume is about 70,000 tonnes. The harvested volume in the quarter is 14 close to 15,000 tonnes compared to 6,700 tonnes. So a great increase in volume in this quarter and EBIT all inclusive of 18 compared to NOK nine in first quarter last year.
So yes, great improvement. Scottish Sifa, fifty percent owned by Lehrer. Here also, increase in harvest volume with good harvest rates, strong biological development with next generation of fish performing well, significant year on year decrease in price realization in this quarter. Volume in 2025 is impacted by reorganizing site structure and long term potential significantly higher than the level that we see on 32,000 tonnes, which is the estimate for 2025. And in this quarter, we achieved the operational EBIT of nine compared to nineteen first quarter last year.
And the main reason for the decrease is the price realization. Then if we look at the farming and the guiding numbers, we to summarize that, 2025, Leroux ’50 thousand tonne, Lerimit seventy five thousand tonne and Lerichertral seventy thousand tonne and a total of 195,000 tonne. And we all know about our target, which is 200,000 tonnes. And we believe if we continuously work with improvements like we do today, this with our target should be within reach. So right now, we are in a good position and have a great fundament for achieving our goal of 200.
Our share of Scottish Sea Farm is 16,000 tonnes, so a total of 211,000 tonnes. Wildcatch, of course, a challenging segment at the moment because of significant quota reduction. The catch volume for trolling fleet, raw material price and volume in the land industry you know, is affected by these reductions. There is 2025 will be challenging. Higher prices has partly offset the impact of lower quotas for trolling, but still it’s really challenging for the industry to take out the price level, the increased price level and the reduction in availability of fish to get to be at a very high level in this segment in 2025.
So cold quota in 2025 is down 32%. Twenty five % stems from overall industry quota reduction and 7% is due to reallocation from the Trolla fleet to the coastal fleet under new regulations. And header quota is down 2% in 2025. And EBIT in the quarter, operational EBIT in the quarter is about NOK 150,000,000. And if we see at the prices for the key species, the cod prices, yes, close to NOK 18, the Haddock is close to NOK 60 and Seit is about NOK 30, which is a strong increase in price level compared to same quarter last year.
The wild catch quarters and the catch volumes. For first quarter, we catch the 3,600 tonne Cod, 5,400 tonne Seitz, three thousand four hundred tonne Hadock and a total of 90,000 tonne compared to 24,000 tonne last year. But the good thing is to look at the remaining quarters compared to 2024, We have a 5,300 tonne cod compared to 6,000 tonne last year and Seite, thirty thousand tonne compared to 10,000 tonne Seite and Haddock, Two Thousand Seven Hundred tonnes. So we have more remaining quarter this year compared to same period last year. And taking into consideration that a fairly good first quarter and the remaining quarter is means that we are in a good situation compared to last year, yes, if we take the quarter situation into consideration.
Yes. Then sales processing, we have operations in 70 countries and sale to more than 80 markets all over the world. And this has been investments done over twenty years, and we feel now that we really have a strong position in all the key markets for seafood. The new thing in this segment is the branch office in South Korea, in Vietnam and in Thailand. And the main reason for this is to take out the potential of this market and to drive the innovation and the market development together with our partners in this market.
And this is also very crucial for our trout operation that we have to create new markets for trout from Norway. The Wapsal sales and distribution had a strong quarter. It’s we continued a positive development in the segment with operational EBIT of first quarter of ’2 ’12 million compared to NOK 176,000,000 first quarter 20 20 4, so a great improvement in first quarter twenty twenty four and first half twenty twenty four profitability supported by the high capacity utilization of Norwegian processing capacity following a high share of quality downgrades. But this year, there is less quality downgrades. And we see now that most the profitability growth from is more from the capacity utilization and high demand in our downstream units in these segments.
And we see that we’re really, really improving in mainly all of our operation out in the market. So there’s been a strong start of the year with a record twelve month rolling operation. There’s a strong demand in the end markets, positive development in emerging markets, strong positioning with strategic customers globally and effects of structural improvements really starts to work in a different operation. And we expectations for continued positive profitability trend in 2025. So I feel that we have a really strong position out in all our key markets and a team that’s really focused on building the markets and the category for seafood.
So to answer.
Schul Mann, CFO, LiraCivic Group: Yes. Thank you, Henning. So we are 6,000 employees, and we work daily on creating sustainable food for our global population, but we also work with structural improvement initiatives. And while we were not happy with the results we posted, perhaps particularly in 2023 and we, 2024, have talked about signs of improvement. We are pleased to report these quarterly figures showing that the improvements are starting also to show in the financial results.
At this slide, we can see the key value drivers on the latter line. We must keep in mind that the spot price for salmon is down 19 compared to a corresponding quarter last year. And despite that, you can see that margin through the value chain for salmon is more or less unchanged. That is very positive, and that is a reflection of a significant cost cut in farming and in particular, in La Roche Terrelle. It’s a reflection of significant improvement in quality and share of superior.
It’s an increase in harvest weights. And you can also see the biological improvement in the harvested figure, which is up 50% almost compared to last year. It’s also a reflection of good work in our downstream operations. If you look on the well catch part, we see margins are more or less even with last year. Volumes are down following a lower quarter.
In this, it’s important to highlight what’s written about in the report that we have a negative inventory effect of around 50,000,000 in Q1 this year compared to last year. And when that inventory is sold, it will lead to also a profit. So all in all, a good quarter also in Wildcatch given the low quarters. So this sums up to the EBIT, Henning already has mentioned, of 1,050,000,000.00, a result we are pleased with given the price development, and we also see there’s a healthy development in EPS. And the return on capital employed was around well 15% this quarter.
At the balance sheet, I will focus on what’s changed. You see compared to last year, we have a higher standing biomass, which is building working capital compared to last year. And you see biological asset cost up just above 800,000,000. We also see the effect of the investments we are doing in the targeted initiatives. I’ll return to them, but you see tangible fixed assets are up.
And you also see the size of balance needed to run this operation. And total asset of around 40,000,000,000. We believe we have a strong balance sheet, investment grade rating, equity ratio of just above 50%. Looking then on cash flow. We are pleased with the cash flow development this quarter.
There is a working capital build compared to the corresponding quarter last year. But compared to fourth quarter, our outstanding biomass has remained high, and we have had held good working capital control while operation in downstream is growing. So it’s a strong operational cash flow. Our return to investments, and you see the effect of financing cost and the IFRS 16 effects. In sum, net interest bearing debt is reduced by NOK 700,000,000 this quarter.
This shows our planned CapEx. There are no changes, but it highlights our priorities also. We have a maintenance CapEx of around NOK 1,000,000,000. It has increased measured in NOK due to weaker Norwegian kroner. We are investing in all parts of operation.
We are developing the Whitefish operation. And now we are coming to an end when it comes to the upgrades of these factories. We are investing also downstream, but we are particularly investing in farming, in initiatives in shielding technology and in improving quality of smalt. And we believe the results this quarter are showing that these investments are having good returns. Then there is a debate, particularly in Norway, to which degree this industry make economic footprint.
So this slide is just highlighting in 2024 the fact that our 3,900 employees and our activity in Norway contributed in total with around NOK 2,500,000,000.0 in tax in 2024. In addition to that, there are significant ripple effects through our NOK 18,000,000,000 in acquisitions from companies all around Norway, as the dotted line shows. And we see the total value creation in Norway is close to NOK 15,000,000,000 and generating around 10,000 jobs. So this is an important industry in Norway, and Lehre is important both for Norway and for many coastal communities. There is a new aquaculture paper.
In that paper, there are suggestions on quite significant changes in how licensing regime in Norway will work. And we support the view of the industry organization, Schurman Norge, which basically is that there is need for more evaluation and considering consequences before there’s any major principal decision being made. Yes. And we also believe the development we are showing in these results, which Henning will return to in a few minutes, they are showing that there are incentives, and it’s possible to do quite a lot of positive work also in the current regulation. So with that, think, give the word back to you on outlook.
Henning Belstad, CEO, LiraCivic Group: Thank you. Then I will go through the outlook going forward. And we start with our strategic targets. I will not go into details about all of these. We try to give you a kind of reporting every quarter now how we are underway to reach the targets.
And we feel that after first quarter that we are in a good position for the rest of the quarters for 2025 and also for what we’re going to achieve going forward after that. So but we focus, of course, keeping our long term goals and objectives out there, at the same time as we focus a lot on the operational improvements to get to our targets. And where are we? We if we look at VAPS sales and distribution, we have a target of NOK 1 point 2 5 0 EBIT target. And where are we?
The last twelve months rolling is about SEK $924,000,000. And one year ago, we were at SEK $723,000,000. So we have the directions towards our goals this year, and we work hard with the short term action and also long term actions. I don’t go in details with that, but we have a good drive in the whole segment. And people are motivated, and I’m really impressed by what they achieve every quarter going forward also.
So we work hard, and we believe that this is achievable. If we look at the farming, we have a target of 200,000 tonnes. We were at about 171,200 tonnes last year. So that means improvement or increased volume of close to 30,000 tonnes. This is going to be done through operational efficiency through adjustment or improvements in row in small production and new technology in sea.
And is this achievable? Yes, we believe it’s achievable. This has been a long term program to achieve this goal. This is showing where we will get the results on harvested fish from the different initiatives that’s done on genetics, raw, smolt, chili technology and the implementation of Lerio Whey. And we see that we are on track on the improvement as we expected for first half.
And we hopefully, there is no guarantee, but we will see greater improvement for second half of twenty twenty five. And if we look at first quarter with the total the improvements in Farming segment, it’s been a very good quarter for us compared to the average of the last five years. We have a net growth of 30% higher. Mortality is 33% lower. Superior share is 11% higher and the biomass at sea is seven percent higher.
So this shows that we are taking out the improvements as expected. And if we look at the shielding technology, we started to harvest much more in the first quarter. And now we report on harvested fish of shielded and not shielded. And if we compare the harvested fish, we see that we reduced lice treatment of 75%, the superior share increased by 20%, and the average harvest rate increased by 8%. So that’s a great improvement, and the results are really promising.
So we believe that what we have done in new technology and especially in submerged technology is making beneficial and improving the way we operate the Farming segment. And if we look at Farming Shielding Technology, increased share of harvest volume from Shielding Technology in first quarter. We were at about 30% and planned for 2025 is about 35%. And then we see the total production of salmon and trout of Lery. And we are focusing on three technology: submersed farming, semi contained farming and Lassa delhousing in North Of Norway.
So we invested a lot into this kind of technology that we really believe in, and we see that this is showing more and more good results. And then at the end, we take up the supply side and expectations from for 2025 and also ’26. And the global supply growth of 6.4% for 2025 and about 2% for 2026. But we also have seen the last couple of months that we have had a tremendous increase in supply. And so the big question is, will this last?
And if we look at the monthly harvest volumes from Europe, we see that we had an increase of close to seventeen percent first four months. And if you look at April, it was up almost 30%. And we see that the growth compared to last year will be lower going forward. So we expect that we build a lot of markets now, which will make a huge potential for the demand in the second half of the year. And we also see on the market sites, the markets are taking out the volume.
There is yes, both in EU, other markets and also in U. S, it’s a stable growth in the markets, the first three months. And but if you look at dig into the other markets, we see especially one market that is really speeding up, and that is China. And China has a huge potential also going forward. And we see that in April and in May that the growth in the Chinese market is three to four times what it was in the same weeks last year.
So China is really taking a strong position as the number one market in from Norway. And that’s good to see. And also to summarize shortly about the different segments. Farming, it’s we have had a good peri behind us. We also see that the position with the fish in the sea and what is coming forward is in a good position.
So that feels good. Wild catch, of course, challenging with the quota situation, but we are doing what we can out of the reduced quota that we have, and we feel that we are doing a good job. And the Upsize and Distribution is showing big momentum, more available supply and also building markets both in Asia and also in Europe and other markets. And we have a strong belief in what we’re going to do in this segment and all the three different segments going forward. So that’s what I have.
Thank you very much.
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