AKVA’s finalized Q2 results confirm losses due to inflation, one-time costs

Published on
August 15, 2022
AKVA Group CEO Knut Nesse

Norway-based aquaculture services and equipment provider AKVA Group has released its full Q2 results after releasing preliminary results earlier in the month, confirming earlier indications the company lost money due to inflationary pressure.

AKVA Group delivered second-quarter 2022 revenues of NOK 907 million (USD 95.1 million, EUR 92.4 million), an increase of 9 percent, or NOK 75 million (USD 7.9 million, EUR 7.6 million), compared with the corresponding period of last year.

Despite the increase in revenue, the company’s earnings took a hit. AKVA’s Q2 earnings before interest, taxes, depreciation, and amortization (EBITDA) fell NOK 76 million (USD 8 million, EUR 7.7 million) to just NOK 3 million (USD 314,566, EUR 305,772). It also made a net loss of NOK 41 million (USD 4.3 million, EUR 4.2 million) compared to a net profit of NOK 16 million (USD 1.7 million, EUR 1.6 million) in Q2 2021.

AKVA’s order intake in Q2 2022 amounted to NOK 827 million (USD 86.7 million, EUR 84.3 million) a NOK 73 million (USD 7.5 million, EUR 7.3 million) decrease from its order intake in Q2 2021 – which amounted to NOK 900 million (USD 92.7 million, EUR 90.9 million). The company added that it had an order backlog in Q2 2022 of NOK 1.8 billion (USD 188.8 million, EUR 183.5 million) at the end of June.

Its profitability was negatively impacted by an estimated NOK 102 million (USD 10.7 million, EUR 10.4 million) from high inflation rates and one-time costs, the company said.

Confirming its Q2 results, the group explained that during the fourth-quarter of 2021 it had experienced “challenging profit margins” due to cost inflations and global supply chain restrictions. This, it said, was “further intensified” in the first-half of this year by the war between Ukraine and Russia – which resulted in increased freight rates, higher energy prices, and increased price levels on raw materials and key components in general.

AKVA’s Sea Based Technology (SBT) segment’s Q2 2022 orders fell NOK 21 million (USD 2.2 million, EUR 2.1 million) to NOK 704 million (USD 73.8 million, EUR 71.8 million), while its Land Based Technology (LBT) business segment’s orders decreased NOK 20 million (USD 2.1 million, EUR 2 million) to NOK 96 million (USD 10.1 million, EUR 9.8 million).

SBT’s revenues for the quarter totaled NOK 736 million (USD 77.2 million, EUR 75 million), up from NOK 716 million (USD 75.1 million, EUR 73 million) in Q2 2021, with NOK 453 million (USD 47.5 million, EUR 46.2 million) coming from the Nordic region, NOK 179 million (USD 18.8 million, EUR 18.2 million) from the Americas, and NOK 104 million (USD 10.9 million, EUR 10.6 million) from Europe and the Middle East.

Land based revenues amounted to NOK 145 million (USD 15.2 million, EUR 14.8 million), up from NOK 97 million (USD 10.2 million, EUR 9.9 million) in Q2 2021, while the Digital segment’s earnings for the period climbed NOK 8 million (USD 838,875, EUR 815,237) to NOK 26 million (USD 2.7 million, EUR 2.6 million).

Looking ahead, AKVA stated that its order backlog and financial profile remain strong and form “a good foundation to execute on the organic growth strategy,” but that the global instability and uncertainty related to supply chain restrictions and cost inflations may continue to impact its profitability in the short-term.

“Based on the underlying demand for salmon the group believes in strong market growth. To meet the future demand a significant part of the production will come from land-based facilities or other unconventional production methods. Hence, the group expects a continued strong market for the Sea Based segment, while for the Land Based segment there will be a potential for exponential growth,” the company said.

It added that digital products are an important part of its total product offerings, and the company will continue to invest and develop attractive solutions – both within Sea Based and Land Based Technology.

Most of AKVA’s revenues are generated from the salmon sector. Revenues from other species relate mainly to the Mediterranean area.  

Photo courtesy of AKVA Group

Contributing Editor reporting from London, UK

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