Aker BioMarine ASA has warned that depleted catches of Antarctic krill will drive up the company’s production costs and hit its earnings this year.
Antarctica’s krill-harvesting season starts in December each year and lasts for around 10 months. Accordingly, Aker BioMarine’s vessels will soon return to shore for scheduled upgrades and maintenance in preparation for the 2022 season.
In a filing with the Oslo Stock Exchange – Oslo Børs – the company advised that this year’s harvests have been slow due to low krill availability in sub-area 48.3 and challenging ice conditions in August and September in sub-area 48.2. Consequently, the year-to-date offshore production volume is at 38,500 metric tons (MT) before fourth-quarter harvests, which is less than two-thirds of the company’s original ambition for the full-year.
Aker BioMarine alsos aid the number of fishing days this season is 18 percent less than the lowest of the comparable figures from the last eight years, and 23 percent lower than average, as it had spent more time than usual searching for krill.
“The 2021 harvesting season has been disappointing, and the significantly lower volumes impact our sales and earnings, "Aker Biomarine CEO Matts Johansen said. "As our vessels now sail to undergo maintenance and upgrades, I’m looking forward to next season starting in the fourth quarter."
The low harvest volumes will result in a higher cost-per-ton of produced krill, which will have a significant impact on margins, Aker said. In addition, its product availability and inventories will be reduced, likely affecting its sales totals.
In July, Aker Biomarine reported its sales of its nutraceutical Superba had been lower than last year, which it attributed to a large drop in sales to South Korea and slower-than-projected sales in the U.S. non-mass market.
According to the latest filing, even if Superba sales in the second half of 2021 are higher than first-half sales, Aker's growth will be lower than previously estimated, despite the company's efforts to implement sales improvement initiatives in recent months.
Revising its outlook for 2021, it now expects its offshore krill-production volumes to total 40,000 to 45,000 MT, depending on the Q4 catch. Revenue is expected to come in below last year’s level, with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 15 to 17 percent.
The company also noted the total krill biomass in Antarctica is sound, with a recent study showing a 17 percent increase over the last 20 years.
Photo courtesy of Aker BioMarine
