Challenging quarter puts AKVA Group in the red, senior appointments made
AKVA Group ASA achieved fourth-quarter revenues of NOK 655 million (USD 70.7 million, EUR 65.2 million), a decrease of 10 percent year-on-year, and losses before interest, tax, depreciation, and amortization (EBITDA) of NOK 40 million (USD 4.3 million, EUR 4 million), compared with earnings of NOK 57 million (USD 6.2 million, EUR 5.7 million) in Q4 2018.
Net profit fell from NOK 19 million (USD 2.1 million, EUR 1.9 million) to a loss of NOK 85 million (USD 9.2 million, EUR 8.5 million), with the Norwegian aquaculture services and equipment provider citing “a challenging quarter with several exceptional items” affecting its earnings, particularly within its Land Based Technology (LBT) segment.
Its LBT revenues for the last quarter totaled NOK 110 million (USD 11.9 million, EUR 11 million), down from NOK 129 million (USD 13.9 million, EUR 12.9 million) in Q4 2018, with its EBITDA and its earnings before interest and taxes (EBIT) crashing to losses of NOK 77 million (USD 8.3 million, EUR 7.7 million) and NOK 82 million (USD 8.9 million, EUR 8.2 million), respecitvely. However, the order intake in Q4 2019 climbed to NOK 815 million (USD 88.1 million, EUR 81.2 million).
In its Q4 results statement, AKVA said that the identification of recent irregularities in accounting uncovered losses in LBT not reflected in the profit and loss.
“None of these irregularities affect the order book, which is at record heights, and a review has been done within Land Based to ensure that the order book includes projects with normal margin expectation,” AKVA said.
It added that a strategy process has been initiated that includes a more focused effort on full grow-out RAS facilities.
Revenues generated by AKVA’s Cage Based Technology (CBT) division ended the last quarter at NOK 529 million (USD 57.2 million, EUR 52.7 million), down from NOK 553 million (USD 59.7 million, EUR 55.1) in Q4 2018. The EBITDA fell to NOK 31 million (USD 3.3 million, EUR 3.1 million) and EBIT landed in the negative, with a loss of NOK 26 million (USD 2.8 million, EUR 2.6 million).
AKVA's Nordic region orders for the quarter totaled NOK 392 million (USD 42.3 million, EUR 39 million), compared to NOK 498 million (USD 53.8 million, EUR 49.6 million) in Q4 2018. In the Americas, revenues fell from NOK 152 million (USD 16.4 million, EUR 15.1 million) to NOK 123 million (USD 13.3 million, EUR 12.2 million). And in its Europe and Middle East (EME) region, the Q4 revenues doubled to NOK 82 million (USD 8.9 million, EUR 8.2 million).
AKVA’s Software (SW) division’s revenues dropped to NOK 16 million (USD 1.7 million, EUR 1.6 million), while EBITDA and EBIT slipped to NOK 5 million (USD 540,133, EUR 497,945) and NOK 3 million (USD 324,071, EUR 298,762).
The group’s order intake amounted to NOK 1.4 billion (USD 151.2 million, EUR 139.4 million) in Q4 2019, with a backlog of NOK 2.3 billion (USD 248.4 million, EUR 229 million) at the end of the quarter.
AKVA said that its net service businesses are about to be expanded, with a new service station about to be built in northern Norway with a partner and plans are underway for another such facility. Plans are also progressing for expanding net sales internationally, and recently, it signed an agreement to acquire net service business Newfoundland Aqua Service Ltd.
Meanwhile, Andreas Pierre Hatjoullis has been named as the company’s interim chief financial officer. Hatjoullis has been serving as group controller at AKVA, a position he has had since 2012. He succeeds Simon Nyquist Martinsen, who resigned from the position earlier this month.
AKVA has also appointed Erlend Sødal as chief operating officer for AKVA group’s Cage Based Nordic business unit. Sødal recently stepped down from the position as managing director of Norway and Australia, and operations director in Skretting Group. Starting on 1 May, he will replace Per Andreas Hjetland, who is taking up a new role as chief commercial officer to focus on business development across the group, with an emphasis on cage-based technology.