Norcod posted higher revenues and higher operating losses in Q2 2023 as the company finished a round of accelerated harvests.
The Norwegian cod farming firm posted NOK 39 million (USD 3.6 million, EUR 3.3 million) in revenue in Q2 2023, up 39 percent from its Q2 2022 result of NOK 34 million (USD 3.1 million, EUR 2.9 million).
Norcod's higher revenue was partially driven by forced harvesting imposed upon the company by the Norwegian Directorate of Fisheries in March 2023, after it discovered sexually mature cod at Norcod's Frosvika, Norway-based facility.
“Total harvest volume ended on 1,038 tons [whole fish equivalent], up 8 percent from Q2 previous year, driven by the accelerated harvest pace,” the company said.
Norcod's higher revenue was offset by greater losses, with the company posting a loss of NOK 47 million (USD 4.3 million, EUR 4 million) for the quarter, compared to an operating loss of NOK 41 million (USD 3.8 million, EUR 3.5 million) in Q2 2022.
Norcod recorded NOK 164 million (USD 15.3 million, EUR 14.1 million) in revenue in H1 2023, up from NOK 117 million (USD 10.9 million, EUR 10.1 million) it posted in H1 2022. However, its operating expenses increased as well, pushing it to a loss before fair-value adjustment of biomass to NOK 159 million (USD 14.8 million, EUR 13.7 million), up from the NOK 87 million (USD 8.1 million, EUR 7.5 million) loss it posted in H1 2022. W
The biggest impact on the company in Q2 came from its accelerated harvest plan, which it said put pressure on Norcod's marketing and sales divisions. But it said its preexisting business relationships were its saving grace.
“Our already established relations with several European retailers proved valuable,” the company said. “Norcod’s sales and distribution partner Sirena managed to do several promotions during the quarter, materializing in a price premium on farmed compared to [wild] cod, thus minimizing the volume that had to be sold on spot level.”
The company also touted its acquisition of fish-processing firm Kråkøy Slakteri during the quarter.
“The vertical integration of Kråkøy is an important step to create a robust and streamlined business model,” Norcod said. “Numerous benefits accrue from this acquisition, such as priority facility access, cost reduction and operational efficiency, enhanced process control and exploration of value-added services. This move aligns with a long-term vision of higher customer satisfaction, cost savings, market expansion, and cost savings.”
Norcod also said it achieved GlobalG.A.P. recertification during the quarter.
“It is of great importance for Norcod to adhere to transparency and be able to refer to a third-party assessment,” the company said.
Looking forward, Norcod said it anticipates market conditions for its farmed cod to improve as expected quota cuts for wild-caught species expected from 2024 and beyond will likely cause supply bottlenecks for the species that will drive up prices.
“We are also looking towards overseas markets such as the U.S., Japan, and China, which is still considered to hold great potential for volume and price as they value the high quality and freshness of the farmed cod,” the company said. “Both Norcod and our customers are having a common view: farmed cod is a sustainable and viable alternative for the customers. [We are working toward] securing year-round supply and helping reduce the pressure on the wild stocks [and] positioning farmed cod as a reliable and sustainable future protein source.”
Photo courtesy of Norcod
