Reykjavik-headquartered Iceland Seafood International hf (ISI) has secured long-term financing in excess of EUR 17 million (USD 18.4 million) from Spanish banks, the company has announced.
The company has also confirmed that its sales and profitability has been hit by the ongoing COVID-19 coronavirus, and the steps taken by governments in key markets like Europe and the United States to control the outbreak. In its statement, ISI said that it started to feel the impact of these measures in mid-March, and that it expects that this will continue in the short-term.
“This applies especially to the foodservice sector in Europe, which to a large degree has been closed. In contrast, retail sales are strong and are expected to remain resilient. Iceland Seafood’s strong position enables the company to manage the situation effectively,” it said.
As well as securing the funds from Spain, the company has also taken measures “to increase funding headroom” for the remaining part of the operation with its banking partner in Iceland. Other actions include implementing contingency plans within the group’s businesses, and tightening risk management controls.
Meanwhile, the preliminary draft of its first-quarter 2020 financials has indicated a normalized profit before tax (PBT) of EUR 2.6 million (USD 2.8 million) for the period, compared to EUR 3.5 million (USD 3.8 million) for same period last year.
The most notable impacts were on sales and profitability of the hotel, restaurant, and café (Horeca) and foodservice sectors, particularly in southern Europe, but that sales to retail, especially in northern Europe, “have performed adequately,” it said.
“[While] it is still uncertain how much and for how long sales and profitability will be impacted by the situation, the group will be negatively impacted in the coming weeks and months,” ISI said. “Due to these negative short-term impacts, the previously announced outlook range for 2020 normalized PBT is withdrawn. Iceland Seafood will communicate further on the matter and provide an update on profit outlook for the year, as less ambiguity will be on the development of COVID-19 and the related restrictions.”
In 2019, ISI achieved sales of EUR 448.2 million (USD 486.4 million), up 29.5 percent on the previous year. Its normalized PBT increased by EUR 4.1 million (USD 4.4 million) to EUR 11.3 million (USD 12.3 million).
The company is holding its annual general meeting (AGM) in Reykjavik on 19 May.
