An expected one- to two-million-metric-ton (MT) rise in the global consumption of Atlantic salmon will underpin AKVA Group ASA’s business growth, maintains the aquaculture services and equipment provider.
Based on industry analysis from Kontali, NASDAQ, and Cardo Partners Analysis, AKVA believes the expected demand growth is in line with the increase in salmon consumption over the last 10 years, adding that the outlook is strongly supported by global megatrends where consumers focus on healthy and sustainable food that is produced close to where they live.
On the supply side, much of the increased volume is likely to come from conventional cage-based farming, supported by improved fish health and technology innovations, it said. The remainder is expected to be supplied from land-based farming and other unconventional technologies.
Meanwhile, farming salmon closer to consumers in Asia and the United States would eliminate the environmental footprint of air transport and is expected to be cost competitive.
“For AKVA group, as a leading global supplier of technology to the salmon industry, the expected increase in both cage-based and land-based salmon farming will represent two growth engines for our business,” CEO, Knut Nesse, said.
From next year, to continue to support farmers and to realize the industry’s growth potential, AKVA intends to ramp-up its spending on its innovation agenda and digital solutions.
The group’s strategy for the period 2021-2023, includes the following elements:
- Topline growth is primarily expected to be organic, with a strong focus on operational excellence.
- Deliver a minimum 25 percent earnings before interest and tax (EBIT) increase year-on-year.
- Step-by-step improve return on average capital employed (ROACE) to a minimum 15 percent by 2023.
- At least 50 percent increase in innovation spending to support new product development and organic growth.
- Increase the spending on the group’s three digital platforms – AKVA connect, AKVA observe, and Fishtalk
“I am pleased that we all concurred on the ambition to deliver minimum 25 percent annual EBIT-increase,” CFO Ronny Meinkøhn said. “We are also confident that AKVA group already has the financial capacity to realize our organic growth strategy, and at the same time pay an attractive and gradually increasing dividend to our shareholders.”
Photo courtesy of Tatiana Belova/Shutterstock
