Dramatic price increases in all areas of its business during the first quarter of 2022 are expected to lead Iceland Seafood International (ISI) to break even for the period, according to the group’s preliminary results.
In a press release, ISI said its Value-Added Northern Europe division had been particularly affected by the “significant rapid price increases” in the quarter. The company said that the price increases impact it more than other companies because it is more reliant on sales to retail customers than to foodservice, and that it takes longer to pass on price increases to customers within the retail sector than to foodservice customers.
The company said since the COVID-19 outbreak in 2020, it has focused on improving its sales balance between the retail and foodservice sectors, and also that as part of this strategy, it has made investments to increase its retail presence in both the United Kingdom and Ireland over the past two years.
“The results in Ireland were especially affected by increased salmon prices in the period, which comes on top of challenging sourcing of whitefish,” ISI said.
ISI also said its U.K. business was still loss-making in the period, with “price increases of all input factors significantly impacting the results.” ISI’s U.K. business also faced challenges in regard to seafood production in the period. This was due to the impact of the omicron outbreak and supply chain disruptions.
“Iceland Seafood has increased prices to its customers to balance the input prices, but the pace of price increases has been unprecedented,” it said. “Clearly, price increases have started to influence demand of seafood products.”
But the group said that amid increased global political instability, it is well-positioned with its production sites and capabilities close to its customers. There are also signs that indicate prices are leveling off in certain areas, it said.
The company’s results in Argentina were not as good as expected, with overall production volumes 21 percent lower during Q1 2022 than same period last year.
Sales and profits of subsidiary IS Iberica and also its sales and distribution division were good, with the former benefiting from its strong market position, and the latter seeing strong demand for all Icelandic production categories, ISI said.
ISI will publish its full Q1 2022 results on 17 May.
Photo courtesy of ISI
