UK fleet’s profitability declines after strong performance in 2014

Published on
July 13, 2016

Total income achieved by the U.K fishing fleet increased by 16 percent in 2014, with landings achieving a first-sale value of GBP 868 million (USD 1.2 billion, EUR 1 billion), according to a new report published by Seafish.

The U.K. seafood authority’s “Economics of the U.K. Fishing Fleet 2014 Report” reveals the total operating profit for the fleet that year was GBP 216 million (USD 287 million, EUR 259 million), a 54 percent increase compared to the previous year. It also finds that GBP 157 million (USD 208.4 million, EUR 188.3 million) of net profit was generated, equal to 17 percent of total income.

The large increase in the fleet’s total income was mainly attributed to the increased volume of pelagic species, while the average prices for demersal and shellfish species increased by 12 percent.

Reduced fuel prices also contributed to the overall improvement in economic performance, said the report.

However, provisional estimates for 2015, find that the industry’s income decreased by 11 percent to GBP 772 million (USD 1 billion, EUR 925.7 million), while operating profit fell to GBP 163 million (USD 216.4 million, EUR 195.5 million).

Seafish said this downturn was driven by the impact of Russia’s EU trade ban, which particularly affected the pelagic sector through a decrease in mackerel prices – from GBP 905 (USD 1,202, EUR 1,085) per metric ton (MT) in 2013 to GBP 645 (USD 856, EUR 774) in 2015.

A declining pattern is also observed in the weight of landings, which in 2014 increased by 21 percent to 759,000 MT; and then decreased by 7 percent last year to 705,000 MT. Despite this decrease, the weight of landings in 2015 was higher than the volumes landed in the years 2008 to 2013.

Arina Motova, senior economist at Seafish, said the findings were a “positive picture” for most of the U.K. fleet even though the total 2015 estimates were “more conservative.”

Motova said, “Our forecast shows that all U.K. fleets benefited from the oil price reduction and the economic performance indicators of most fleets show an improving profitability picture despite challenges such as the Landing Obligation coming in to effect for some fisheries.”

In 2015, the number of active fishing vessels in the United Kingdom fell to 4,536 from 4,565 in 2014, with over 2,000 vessels classified as inactive. A further 1,700 vessels were classified as low activity vessels having generated less than GBP 10,000 (USD 13,277, EUR 11,994) in fishing income.

Contributing Editor reporting from London, UK

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