Iceland Seafood posits new strategy for 2024, focusing on Spanish, Irish operations

With the sale of the group's U.K. business now complete, the company believes 2024 should be more positive.
ISI's booth at the 2024 Fish International expo
ISI's booth at the 2024 Fish International expo | Photo courtesy of ISI
6 Min

Reykjavik, Iceland-headquartered Iceland Seafood International (ISI)’s performance in 2023 was marred by price fluctuations, uncertainty in key markets, and decreased purchasing power driven by inflation that negatively impacted demand, leading some consumers to switch to less-expensive proteins, ISI Chair Birna Einarsdóttir said at the group’s annual general meeting on 21 March.

Now, with ISI’s sale of Iceland Seafood UK to Danish value-added seafood producer Epersen complete, the group plans to introduce a new strategy for 2024, focusing on the strong position of its operations in Spain and Ireland, Einarsdóttir said.

In the group’s 2023 annual report, published on 21 March, Einarsdóttir said the company's sales toward the end of 2023 were "a marked improvement, which allowed us to look ahead with a degree of optimism.”

Einarsdóttir said ISI completed two successful rounds of share capital increases in the year. In May, ISI raised a total of ISK 150 million (USD 1.1 million, EUR 1 million), followed by a second round in December totaling ISK 200 million (USD 1.5 million, EUR 1.3 million). These funds boosted group equity by EUR 13 million (USD 14.1 million), with a resulting equity ratio of 28.5 percent by the end of the year.

“The losses incurred by the U.K. business drove the need for increased equity to strengthen the company's overall position,” she said.

ISI CEO Ægir Friðbertsson, who started at the company on 27 October 2023 after previous CEO, Bjarni Ármannsson, left the company in September 2023, said the company's U.K. holdings played the primary role in ISI's poor operating performance in recent years.

“[It was] generating higher interest rates and a higher cost of capital for the company – not to mention the time spent by management on the issue," Friðbertsson said.

In 2023, the total negative impact of the discontinued operation, including negative operational results until sale completion and impairment of assets, amounted to EUR 18.8 million (USD 20.4 million).

Friðbertsson said he “firmly believes" the strong value-added companies in Spain and Ireland, along with its sales and distribution (S&D) division, will “remain strong and profitable.”

ISI achieved total sales of EUR 429.9 million (USD 465.9 million) last year, an increase of 2 percent on 2022, while sales by volume increased 7 percent to 78,056 metric tons (MT).

ISI's division’s sales of EUR 215.5 million (USD 233.5 million) were slightly down on the prior year's value and volume.  Friðbertsson said its sales were good at the beginning and end of the year but “slowed down considerably” in the second and third quarters.

Meanwhile, 2023 was “a very good year” for the group’s S&D division, he said. Although sales and profitability were down on 2022’s record year, demand for products from Iceland remained strong, while sales of pelagic products were “especially good” – 30 percent higher than in 2022.

The full-year sales of the Value-Added Northern Europe division were up 3 percent, reaching EUR 54.2 million (USD 58.7 million) last year, with the 11 percent reduced sales volume offset by price inflation. Friðbertsson said steep salmon price increases in 2023’s first half impacted full-year profitability.

Overall, ISI’s normalized profit before tax (PBT) of EUR 700,000 (USD 759,000) was down from the EUR 12.1 million (USD 13.1 million) recorded in 2022. The company said fragile economic situations in several of its key markets impacted its 2023 results and that sales price decreases in the second half of the year negatively affected margins, especially in the Value-Added Southern Europe division.

ISI said finance costs increased significantly from the previous year due to higher interest rates and debt levels.

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