Klepp, Norway-based aquaculture services and equipment provider AKVA Group enjoyed increased revenue, earnings, and profit in Q1 2022, but supply chain challenges hampered its overall performance.
According to AKVA’s first-quarter 2022 financial update, the company had revenue of NOK 849 million (USD 86.4 million, EUR 83.1 million) in Q1, up from the NOK 719 million (USD 73.2 million, EUR 70.3 million) reported for Q1 2021. Its earnings before interest and taxes (EBIT) increased from NOK 36 million (USD 3.7 million, EUR 3.5 million) to NOK 59 million (USD 6 million, EUR 5.8 million). The quarter’s net profit was up NOK 26 million (USD 2.6 million, EUR 2.5 million) to NOK 40 million (USD 4.1 million, EUR 3.9 million).
AKVA’s profitability was negatively impacted by supply-chain restrictions and cost inflations, which cost the company an estimated NOK 30 million (USD 3.1 million, EUR 2.9 million) in the quarter. However, it said the sale of shares in Atlantis Subsea Farming AS to SinkabergHansen AS, completed in Q1 2022, resulted in a profit of NOK 33 million (USD 3.4 million, EUR 3.2 million).
As part of the transaction, AKVA becomes the owner of the technology that has been developed in the project.
“During Q4 2021, AKVA group experienced somewhat challenging profit margins due to cost inflations and global supply chain restrictions. This has been further intensified in Q1 2022 due to the conflict between Ukraine and Russia,” it said.
The company received orders in excess of NOK 1 billion (USD 101.8 million, EUR 97.8 million) in the first quarter of 2022, up from NOK 651 million (USD 66.3 million, EUR 63.7 million) in Q1 2021.
AKVA's first-quarter 2022 order intake brought a NOK 86 million (USD 8.8 million, EUR 8.4 million) year-on-year uplift for AKVA’s Sea-Based Technology segment. Its revenue reached NOK 676 million (USD 68.2 million, EUR 66.1 million), while AKVA's Land-Based Technology business segment’s orders increased by NOK 185 million (USD 18.8 million, EUR 18.1 million) to NOK 254 million (USD 25.9 million, EUR 24.8 million), and its Digital (DI) segment’s order book was up NOK 21 million (USD 2.1 million, EUR 2 million) to NOK 35 million (USD 3.6 million, EUR 3.4 million).
AKVA's overall order backlog at the end of the quarter stood at more than NOK 1.8 billion (USD 183.3 million, EUR 176.1 million) at the end of March 2022, up 2 percent from a year previously.
In regard to its three core segments, Sea-Based Technology’s revenues in the quarter totaled NOK 676 million (USD 68.6 million, EUR 66.1 million), up from NOK 590 million (USD 60 million, EUR 57.7 million) in Q1 2021, with NOK 492 million (USD 50 million, EUR 48.1 million) coming from the Nordic region, NOK 97 million (USD 9.9 million, EUR 9.5 million) from the Americas, and NOK 87 million (USD 8.9 million, EUR 8.5 million) from Europe and the Middle East.
AKVA's Land-Based Technology segment’s revenue reached NOK 151 million (USD 15.4 million, EUR 14.8 million), up from NOK 115 million (USD 11.7 million, EUR 11.2 million) in Q1 2021, while its Digital segment’s earnings for the period climbed NOK 7 million (USD 712,000, EUR 685,000) to NOK 21 million (USD 2.1 million, EUR 2 million).
Most of AKVA’s revenues are generated from the salmon sector. The revenues from other species relate mainly to the Mediterranean area.
AKVA’s order backlog and financial profile “remains strong and forms a good foundation to execute on the organic growth strategy," it said. But while its long-term fundamentals remain unchanged, instability and uncertainty related to supply-chain restrictions and cost inflations may continue to impact the company's profitability in the short-term, it said.
Photo courtesy of the AKVA Group
