AKVA Group posts “respectable” results for 2020

Published on
April 16, 2021

Norwegian aquaculture services and equipment provider AKVA Group received orders totaling NOK 3.37 billion (USD 399.5 million, EUR 334.1 million) last year, down from almost NOK 3.41 billion (USD 404.2 million, EUR 338.1 million) in 2019, but it did achieve increases in both its revenue and net profit.

According to the public listed company’s 2020 annual report, its Land-Based Technology (LBT) and Digital Solutions (DS) segments had an increase in order backlog of NOK 314 million (USD 37.2 million, EUR 31.1 million) compared to 2019, while its Cage-Based Technology (CBT) segment saw an order decrease of NOK 121 million (USD 14.3 million, EUR 12 million).

CBT posted operating revenues of NOK 2.7 billion (USD 320 million, EUR 267.7 million), an increase of 6.8 percent compared to 2019, thanks to higher earnings in the Nordic and Americas regions.

LBT’s operating revenues slipped by 3.6 percent to NOK 402 million (USD 47.7 million, EUR 39.9 million), a result of several projects coming to an end, while DS’s operating revenues fell by NOK 57 million (USD 6.8 million, EUR 5.7 million) to NOK 69 (USD 8.2 million, EUR 6.8 million).

Overall, AKVA’s year ended with a 3 percent increase in revenue at NOK 3.2 billion (USD 376.9 million, EUR 315.3 million), while its profit climbed by NOK 74 million (USD 8.8 million, EUR 7.3 million) to NOK 91 million (USD 10.8 million, EUR 9 million).

In the report, AKVA CEO Knut Nesse wrote that while 2020 started with optimism, a strong order backlog, and a solid pipeline of prospects, the COVID-19 global pandemic meant that AKVA’s focus needed to shift to securing the health and safety of its employees, as well as to maintaining liquidity, supply security, and ensuring work for all through a steady order intake.

“We believe to a large extent, we have managed the situation well due to the great commitment and hard work all AKVA employees have contributed with throughout a challenging 2020. This has also been important for what became a respectable financial performance,” he said.

Nesse said while the pandemic had disrupted its core salmon market – notably with the closure of the HORECA (hotel, restaurant and café) sector and that volumes had diverged into retail – there are expectations of a foodservice recovery post-COVID-19. As a result, he predicted demand growth for farmed salmon of one to two million metric tons (MT) by 2030, he said.

“AKVA Group believes that the demand will be driven by increased focus on environment and health, and distribution of salmon to new markets,” he said. “The increased demand will be covered through both conventional and unconventional supply sources. Increases in conventional production will require investments in new technology to increase capacity and utilization in existing facilities. However, a significant part of the increased demand needs to be covered from unconventional production, and AKVA group believes that full grow-out facilities on land will play an important role in the future.”

In this regard, he highlighted two strategically important deals; a NOK 100 million (USD 11.9 million, EUR 9.9 million) agreement for the delivery of its Tubenet sea lice prevention concept, and the NOK 500 million (USD 59.3 million, EUR 49.6 million) contract signed with Nordic Aqua Partners for the delivery of a full grow-out recirculating aquaculture system (RAS) facility in China.

Looking ahead, Nesse said AKVA had set a target of upping its spending within digitalization and technology by 50 percent to support growth ambitions. Additionally, it will establish a so called “Centre of Excellence” to further strengthen its position in the salmon technology space.

Nesse added that in terms of growth, the acquisition of 33.67 percent of the shares in Observes Technologies in February 2021 was an important strategic milestone to improving AKVA’s digital agenda.

“AKVA group is in a very attractive position for future profitable growth. Our strategy outlines a strong organic top-line growth and minimum 25 percent increase in EBIT year-on-year the coming years. My role is to make sure we make the right priorities and execute our innovation and digital agenda to the best for AKVA, our customers, shareholders, and stakeholders,” he said.

Nesse added that despite AKVA falling victim to a cyber extortion attack in January 2021, the organization’s “long-term fundamentals remain unchanged” and it remains confident of reaching its targets.

Photo courtesy of AKVA Group

Contributing Editor reporting from London, UK

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