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Hidden values in Lerøy

Stock Exchange hopeful Lerøy Seafood Group is emerging as an attractive alternative for salmon investors. While the two Exchange-listed salmon companies on the Oslo Stock Exchange are priced fresh with regard to their revenue from last year, the Lerøy shares are priced with a discount. The veteran fishing trader Lerøy has also secured production through the shareholding in the Kristiansund company Hydrotech-Gruppen. Hydrotech, which is one of the largest trout producing companies in Norway, will be producing 20,000 tonnes of salmon and trout this year. A substantial portion of the 13.4 million kroner for associated companies in the 2000 figures for Lerøy, comes from this investment. The trout market in 2001 has been significantly better than the previous year, and fish farmers are positive about this year's revenue prospects. The investment in Hydrotech is exciting; especially since the trout sellers are now achieving excellent prices for their products. Lerøy is also in negotiations with the Tiedeman group on the take-over of the Sea Bass and Sea Bream producer Grupo TiMar in Portugal and Spain. A Letter of Intent has been signed for Lerøy to take over Grupo TiMar. This is also a company with considerable potential. A theoretical capacity of 6,000 tonnes of Sea Bass and Sea Bream in addition to 25 million juveniles, provides opportunities for good operating profit margins. Like Pan Fish, Lerøy has also secured shares in the herring oil industry. One quarter of Eger Holding that among others owns Egersund Sildoljefabrikk (herring oil plant), can be a profitable investment in the wake of price rises for herring oil during the past 12 months. Last year Lerøy sold fish for NOK 2,720 million. This is a great deal more than Fjord Seafood and on a par with Stolt Sea Farm. The operating margins are naturally a good deal less than the marine farmers' margins. Lerøy now has a market value of NOK 573 million. This is not discouraging after an annual result of NOK 51.1 million in 2000. Being listed on the stock exchange will reveal the true values of the Lerøy system to a greater extent. "There is no date decided on listing on the exchange, but this can take place very quickly if the conditions are right," said Lerøy CEO Ole-Eirik Lerøy. Returns on the Lerøy shares are shareholder-friendly with NOK 0.60 øre per Lerøy share; a definite plus for curious investors.