November 16, 2023

 

AKVA Group highlights impact of Norway salmon tax on business activities

 

In its third-quarter results presentation, Norway-based AKVA Group, a leading aquaculture services and solutions provider, has raised concerns about the adverse effects of the Norwegian salmon tax on both sea-based and land-based operations, Fish Farmer reported.

 

The company reported a slight reduction in third-quarter revenues, totalling NOK 817 million, compared to NOK 840 million in the same period last year.

 

AKVA said that its Sea Based business segment is acceptable, citing a healthy product mix and the successful introduction of deep farming concepts.

 

But the group's the Land Based business faced challenges due to a high-cost base and sluggish market demand.

 

To address this, the company plans a "rightsizing" process in Q4, targeting NOK 45 million in annual cost savings to align with the current and expected activity levels.

 

The company announced an increase in EBITDA to NOK 78 million from NOK 25 million in Q3 2022, and EBIT showed improvement at NOK 29 million compared to a deficit of NOK 59 million in the previous year.

 

In response to changing market conditions, AKVA intends to revise its medium-term financial targets during Q4. Despite slightly higher activity levels in the first three quarters of 2023 compared to the previous year, the introduction of the resource tax has negatively impacted both land-based and sea-based operations.

 

Order intake for Q3 2023 increased to NOK 574 million, compared to NOK 450 million in Q3 2022. The order backlog reached NOK 731 million, up from NOK 672 million last year.

 

While Nordic region revenues experienced growth, revenues from Europe, the Middle East, and North America saw a decline. The company also highlighted significant contracts, including a RAS contract for Nordic Aqua Partners and a post-smolt contract for Cermaq Norway.

 

The acquisition of 51% of shares in the in-cage monitoring system business Submerged AS was completed during the quarter, with an option to increase ownership to 100% in 2028. Additionally, ownership in the net manufacturing and maintenance business Newfoundland Aqua Service Ltd was raised from 70% to 98.5% through the execution of options.

 

-      Fish Farmer