This article first appeared on GuruFocus.

Release Date: November 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Leroy Seafood Group ASA (LYSFF) reported record earnings in the bob sales and distribution segments, driven by strong demand and strategic customer relationships.

The company achieved a significant reduction in net interest-bearing debt, decreasing from 8.5 billion to 8.1 billion.

Positive working capital development was noted, contributing to healthy cash flow generation despite high capital expenditures.

The company has seen a strong biological development in certain regions, with high survival rates and improved license utilization.

Structural improvements in the sales and distribution segment have led to a record 12-month rolling operational performance, with an EBIT margin close to 5%.

The quarter experienced low profitability due to low spot prices for salmon and trout, negatively impacting operational EBIT.

Costs in the farming segment increased quarter on quarter, reversing a trend of four consecutive quarters of cost reduction.

High sea water temperatures and sea lice pressure posed challenges, affecting biological performance and harvest timing.

The wild catch segment faced a 32% reduction in quotas year-on-year, impacting catch volumes for the trawling fleet.

Operational EBIT in the wild catch segment was only 50 million, reflecting challenging operational conditions despite positive price developments.

Warning! GuruFocus has detected 6 Warning Sign with LYSFF.

Is LYSFF fairly valued? Test your thesis with our free DCF calculator.

Q: Can you elaborate on the challenges faced in the farming segment this quarter? A: Henning Beltestad, CEO, explained that the farming segment faced low profitability due to decreased spot prices for salmon and trout, which were 8 NOK lower compared to the same quarter last year. Additionally, there were increased costs following four consecutive quarters of cost reduction, and challenging biological conditions, although year-to-date biological performance remains strong.

Q: How did the wild catch segment perform, given the quota reductions? A: Henning Beltestad noted that despite a 32% reduction in quotas for 2025, the wild catch segment saw a positive price increase that offset the impact of lower quotas. The segment faced challenging operational conditions, but the price development was favorable, helping to maintain profitability.

Q: What are the expectations for the sales and distribution segment moving forward? A: Henning Beltestad highlighted that the sales and distribution segment had a record quarter, driven by structural improvements and strong demand in emerging markets. The EBIT margin was close to 5%, and the company expects continued positive profitability trends into 2026.

Q: Could you provide more details on the financial performance and outlook? A: Sjur Malm, CFO, reported that harvest volumes increased by 15% year-over-year, but profitability was down due to lower spot prices and higher costs. The company is focusing on reducing working capital and has seen healthy cash flow generation, despite high CapEx. The outlook remains positive with expected improvements in farming and sales segments.

Q: What strategic initiatives are being implemented to address the challenges in farming? A: Henning Beltestad mentioned investments in new shielding technology and submerged farming to improve sustainability and performance. The company is also focusing on improving planning, streamlining operations, and enhancing feeding strategies to reduce costs and improve efficiency.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.