Record profit for Royal Greenland in 2019, key investments continue

Published on
April 30, 2020

Nuuk, Greenland-based wild-caught seafood supplier Royal Greenland AS achieved record profits before tax of DKK 404 million (USD 58.9 million, EUR 54.2 million) in 2019.

While this was boosted by the sale of the two trawlers, Sisimiut and Qaqqatsiaq, for a total DKK 141 million (USD 20.6 million, EUR 18.9 million), the company said the ordinary operating profit was still the best in its history.

According to the company’s annual report for 2019, turnover increased by 3 percent to DKK 5.3 billion (USD 733.1 million, EUR 711 million), while its core activities “continued to develop positively” in line with its “North Atlantic Champion” strategy to constitute 77 percent of turnover, compared to 41 percent six years ago.

Markets in Asia and North America continued to grow in 2019, and together accounted for 44 percent of Royal Greenland’s turnover.

Sales to Asia amounted to DKK 1.8 billion (USD 262.5 million, EUR 241.4 million), equivalent to 34 percent of turnover. Five years ago, this share was 23 percent. Turnover in Asia grew by 13 percent, with the Chinese market making particularly good progress. The main products supplied to China were shell-on prawns and Greenland halibut, but there were also significant sales of cod, snow crab, and cooked and peeled prawns.

Turnover from the North American market increased by more than 60 percent to exceed DKK 551 million (USD 80.4 million, EUR 73.9 million). The increase is primarily related to Royal Greenland’s takeover of Canadian snow crab producer A&L Seafoods, although the turnover of other products also increased.

Additionally, a sales company in Boston was established to sell further along the value chain – to foodservice distributors and retail customers.

Earnings from European markets, meanwhile, decreased to less than DKK 1.7 billion (USD 248 million, EUR 227.9 million) last year, with the decline attributed to the discontinuation of unprofitable orders for retail customers, lower sales of shell-on prawns to Russia, and a reduced supply of cod from inshore fisheries in Greenland.

Its main European markets are Germany, France, the United Kingdom, Italy, Spain, Portugal, and Russia. Together, these markets accounted for 31 percent of turnover.

With sales of DKK 2.1 billion (USD 306.3 million, EUR 281.6 million), Scandinavia accounted for 23 percent of the group's turnover. The region is an important market for sales of prawns, cod, smoked products and breaded products. Last year’s turnover remained at the same level as 2018, with a small improvement in Sweden.

With regards to investments, to replace the sold trawlers Sisimiut and Qaqqatsiaq, Royal Greenland took delivery of new Sisimiut in June 2019 and Avataq in December. A third trawler, to replace the prawn trawler Nataarnaq, is being built at the same yard as the first two, with expected delivery in 2021.

On the factory side, the upgrading of facilities – particularly in northern Greenland – has been maintained in order to strengthen inshore activity. In Newfoundland, Canada, a factory for the production of live lobster has been established, while Nova Scotia-based A&L Seafoods is strengthening the group’s position in the snow crab sector. It also recently entered into a joint-venture with a company in Chile to strengthen its crab activities.

The report also highlighted that in December, Royal Greenland signed an agreement with Chinese company Beiyang Jiamei Seafood to acquire 20 percent of the Qingdao business. The two have worked closely together for a number of years, utilizing Beiyang Jiamei’s local market and online trading expertise. One of main aims of the deal is to strengthen Royal Greenland’s brand on digital platforms.

Looking ahead, the report states that “the fundamental expectations of 2020 are continued positive development in both fisheries and sales of our wild-caught high-quality products.” It also anticipates that turnover will be at the 2019 level, but with higher earnings before extraordinary items.

“The course of the global economy, including Brexit, and a possible trade war between the U.S.A. and China, or between the U.S.A. and Europe, and not least the outbreak of coronavirus, are key uncertainties,” the company stated

It added that while COVID-19 will affect the group to a “significant extent,” further quantification of the impact was not yet possible.

“The situation is being monitored closely, and we are taking all of the measures necessary to minimise the effect, so that Royal Greenland can be in as strong a position as possible on the other side of this crisis,” the company said.

Royal Greenland will hold its annual general meeting on 13 May, 2020, at its head office in Nuuk.

Photo courtesy of Royal Greenland

Contributing Editor reporting from London, UK

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