On the back of doubled profits in 2021, Akureyri, Iceland-based vertically integrated seafood firm Samherji is planning a EUR 400 million (USD 405 million) in expanding its aquaculture operations.
The revelation was made at the company’s 2022 annual general meeting on 22 July, where it announced total annual sales of EUR 357.7 million (USD 362.9 million), operating income of EUR 377.5 million (USD 383.2 million), net profit of EUR 36.6 million (USD 37.1 million), and consolidated profit of EUR 118.8 million (USD 120.6 million) in 2021. Samherji posted a net profit of EUR 30 million (USD 30.4 million) and a consolidated profit of EUR 50.7 million (USD 51.4 million) in 2020.
"We at Samherji have great faith in land-based fish farming, but all development in the sector is very costly,” Samherji CEO Thorsteinn Már Baldvinsson said. “Therefore, the company must be financially strong now as before. The consolidated financial statements show that this is the case. The company's annual general meeting decided not to pay dividends and instead channel the company's investment capacity into new projects in the fish industry.”
Samherji’s plan to invest in land-based fish farming will begin with a pilot project in Öxarfjördur, Iceland and a 40,000-metric-ton salmon farm in the Resource Park next to the Reykjanes Power Plant in the Reykjanes Peninsula. The project was first announced in June 2021, with HS Orka named as the developer of the project. Samherji disclosed the project has an estimated cost of EUR 400 million (USD 405 million) and the company’s board of directors has increased the share capital of subsidiary Samherji Fiskeldi by EUR 50 million (USD 50.6 million) to pay for the first phase of the project. The Öxarfjördur pilot project will cost EUR 26.6 million (USD 26.9 million) and the new hatchery in Stadur, Grindavík, Iceland will cost EUR 6.6 million (USD 6.69 million).
“Work is underway to expand the land-based farming site in Öxarfjördur. Breeding facilities and production will double, which will result in the site's capacity to produce up to 3,000 MT annually. A new hatchery will also be built there,” Baldvinsson said.
The company acknowledged the sale of a 12 percent stake in Neskaupstaður, Iceland-based Síldarvinnslan, one of the largest fisheries companies in Iceland and the country’s main producer of pelagic products. Síldarvinnslan purchased Vísir for ISK 20 billion (USD 144.4 million, EUR 143.5 million) in early July 2022 and a 34 percent stake in salmon-farming company Arctic Fish Holding for NOK 1.1 billion (USD 113.8 million, EUR 108.1 million).
Samherji turned a EUR 64.6 million (USD 65.4 million) profit on the sale of its stake in Síldarvinnslan, and an additional EUR 17 million (USD 17.2 million) in profit from the sale of other assets in 2021. Samherji’s total assets at the end of 2021 had reached EUR 868 million (USD 879.7 million), and its equity totaled EUR 639.3 million (USD 647.8 million).
Baldvinsson said Samherji launched a new pelagic vessel, the Vilhelm Thorsteinsson EA11, in April 2021 and has invested EUR 240 million (USD 243.2 million) in fleet upkeep and renovation over the past five years.
"Samherji has placed great emphasis on investing in new vessels, equipment and technology, both at sea and on land,” Baldvinsson said. “We believe this will allow us to withstand international competition and create interesting and demanding jobs here in Iceland."
Baldvinsson said two of the biggest challenges facing the company in the remainder of the year are high oil prices and an investigation into allegations of wrongdoing in its Namibia operations, which has become known as the “Fishrot” sandal.
"The cost of oil has skyrocketed, and oil is the second-highest cost in the fishing industry after wages. How prices will develop in the future is entirely uncertain and will be affected by many external factors. For example, the oil costs for the vessel Vilhelm Thorsteinsson will increase by approximately EUR 2 million [USD 2.02 million] annually."
Baldvinsson revealed in a 22 June statement and apology the company’s affiliates in Namibia had “a lot of chaos in their operations, including regarding payments for fishing rights.” The fishing rights were allocated by Namibia’s state-owned fisheries company, National Fishing Corporation of Namibia (FISHCOR) between 2014 and 2019.
"As is well-known and publicly documented, the operations of companies in Namibia that were affiliated with Samherji are currently under investigation. It is important to state that none of our employees have been charged. No extradition of any of them has been requested, and we are not involved in the criminal case proceedings against Namibians who have been imprisoned for two-and-a-half years without being sentenced. The investigation in Iceland has been going on for two-and-a-half years without revealing anything that justifies attaching individual Samherji employees with the status of accused persons under the law,” Baldvinsson said at the company’s 2022 annual meeting. “Samherji has responded to this in various ways and will continue to defend the innocence of its employees, who I am certain will be cleared of these allegations. In this regard, I am pleased to emphasize that our business partners around the globe have remained loyal to us.”
Photo courtesy of Samherji
