AKVA Group issues profit warning
Aquaculture technology and services provider AKVA Group ASA has announced that it expects to report negative earnings before interest and taxes (EBIT) for the fourth quarter of 2019, with lower than projected revenues from land-based projects cited as being largely responsible for the downturn.
Based on a preliminary assessment of its results from the closing three months of last year, the company’s current estimate is that its EBIT loss will be in the range of NOK 25 million to NOK 30 million (USD 2.8 million to 3.4 million, EUR 2.5 million to 3 million) and that its EBIT loss margin will be between negative 4 and 5 percent.
In turn, this implies a full-year EBIT of NOK 136 million to NOK 141 million (USD 15.3 million to 15.8 million, EUR 13.8 million to 14.3 million) compared with NOK 130 million (USD 14.6 million, EUR 13.2 million) in 2018. The EBIT margin for the year will be between 4.5 percent and 4.7 percent, versus 5 percent in 2018.
The preliminary revenue in the last quarter was lower than expected, especially within the Land Based segment, causing reduction in EBIT, AKVA said in a statement, adding that the reduction was mainly caused by project delays.
Also contributing to the Q4 shortfall were guarantee costs related to certain deliveries of feed barges and nets; provisions for bad debt and guarantee cost related to specific projects within the Land Based segment; and reduced margin expectations for a number of projects, specifically within the Nordic Cage Based segment
Also according to the statement, the preliminary EBIT for Egersund Net for the full-year 2019 is in absolute terms better than the (proforma) EBIT for 2018. However, due to guarantee costs and low activity levels, its preliminary EBIT is negative, and this represents a significant deterioration compared to the “exceptionally strong” EBIT of NOK 20 million (USD 2.2 million, EUR 2 million) in Q4 2018.
AKVA’s full Q4 2019 results will be published on 14 February.
Photo courtesy of AKVA Group