AKVA loses Chinese, Chilean RAS contracts to coronavirus
Klepp, Norway-headquartered aquaculture services and equipment provider AKVA Group has seen contracts for the construction of two new fish farm projects canceled due to uncertainty brought by COVID-19.
In December last year, the group’s wholly-owned subsidiary, AKVA Group Land Based A/S, was selected by Nordic Aqua Partners as the technology supplier for its full grow-out recirculating aquaculture system (RAS) project in China. This facility had a targeted harvest volume of 8,000 metric tons (MT) by 2026.
AKVA’s delivery, which had an estimated value of NOK 500 million (USD 47.7 million, EUR 43.7 million) in the period 2020 to mid-2023, was dependent on certain conditions to the project’s equity financing. It was agreed that AKVA would participate with EUR 3.1 million (USD 3.4 million) in equity in the project. However, this financing has now been canceled due to the COVID-19 situation, the company said.
Nordic Aqua Partners said it will continue its fundraising process, with hopes of having the project fully financed later this year.
Also in December, another of the group’s subsidiaries, AKVA Group Chile S.A., entered into a sales and supply contract with Cooke Aquaculture Inc. for delivery of an RAS facility in Chile.
This contract, with a value of EUR 10.3 million (USD 11.3 million) was expected to be delivered between the first quarter of this year and Q4 2021.
Cooke Aquaculture has now canceled the contract due to the COVID-19 situation, AKVA confirmed.
AKVA previously reported fourth-quarter revenues of NOK 655 million (USD 62.5 million, EUR 57.2 million), which represented a decrease of 10 percent year-on-year. It also reported its quarterly earnings before interest, tax, depreciation, and amortization (EBITDA) represented a loss of of NOK 40 million (USD 3.8 million, EUR 3.5 million), compared with gains of NOK 57 million (USD 5.4 million, EUR 5 million) in Q4 2018.
The company’s net profit fell from gains of NOK 19 million (USD 1.8 million, EUR 1.7 million) to losses of NOK 85 million (USD 8.1 million, EUR 7.4 million), with AKVA citing a challenging quarter with several exceptional items affecting its earnings, particularly within its Land Based Technology (LBT) segment.