By focusing on sustainability and driving forward improvements to our farming operations, we aim to create value for all our stakeholders.
Improving sustainability is key to increasing our profits. By focusing on reducing our environmental impact and improving fish welfare, we aim to increase harvest rates and reduce production cost.
We aim to provide our shareholders with a competitive return on capital invested and have set a ROCE target of 12%.
Our investments reflect our growth strategy: digitalization, post-smolt, biosecurity and fish welfare, including a continuous evaluation of expansion opportunities.
Grieg Seafood Group achieved a good performance in 2018. We reached our expected harvest volume of 74 623 tonnes, an increase of approximately 20 % compared to 2017. The average spot price for 2018 was NOK 59.22 per kg, up by NOK 0.05 per kg compared to last year. The Groups operating income increased by NOK 483 million and came to NOK 7 500 million. In addition to a strong market for our product, the results were achieved by maintaining a strict focus on sustainability and driving forward improvements to our farming operations. Total cost excluding depreciation and write down was NOK 6 216 million, an increase of NOK 284 million compared to 2017, which mainly relates to higher harvest volume.
EBIT for the Group before fair value adjustment of biological assets ended at NOK 1 099 million, an increase of almost 22 % compared to last year. The EBIT per kg of NOK 14.72 was positively affected by the harvest volume and high spot prices, however cost related to Pancreas Disease (PD), Harmful Algal Bloom (HAB) and gill diseases during the year had a negative impact in terms of high cost and lower price achievement. By improved monitoring of biological conditions at the sea, we believe we were able to reduce the negative impact of the incidents we experienced during the year. Total farming cost per kg for the Group was NOK 43.1 compared to NOK 43.4 in 2017.