Knut Nesse is AKVA Group CEO.
AKVA Group ASA, a leading technology and service partner for the global aquaculture industry, reported robust financial results for the second quarter of 2024, marked by record-high quarterly revenue and significant improvements in profitability.
"The activity level in the second quarter was high with record high quarterly revenue and acceptable order intake. The high activity level is driven by the Sea Based business segment and positive momentum in the Nordic market. The market for Land Based is still slow and AKVA has not been awarded any new significant contracts so far in 2024," the company said in a press release.
The company delivered a revenue of NOK 1,014 million (EUR 83.33m / USD 93.45m), an 8% increase from the same period last year, reflecting continued growth despite challenges in certain market segments.
The company’s EBITDA surged to NOK 110 million (EUR 9m / USD 10m) in Q2 2024, up from NOK 86 million (EUR 7.07m / USD 7.93m) in Q2 2023.
However, the total order intake for the quarter dropped by almost 1 billion Norwegian krone year-on-year, standing at NOK 888 million (EUR 73m / USD 82m), compared with NOK 1,840 million (EUR 151.61m / USD 170.61m) in Q2 2023, which AKVA says is primarily due to slower activity in the Land Based Technology (LBT) segment.
The order backlog stood at NOK 2.4 billion (EUR 198.64m / USD 222.75m) at the end of June 2024, which the company says demonstrates a solid pipeline of future business.
AKVA reports that its Sea Based Technology (SBT) segment was the primary driver of growth during the quarter, with revenue rising to NOK 842 million (EUR 69.2m / USD 77.6m), up from NOK 733 million (EUR 60.27m / USD 67.55m) in Q2 2023. EBITDA for SBT increased to NOK 106 million (EUR 8.71m / USD 9.77m), with a margin improvement to 12.6%. The segment’s order intake remained strong at NOK 713 million (EUR 58.6m / USD 65.7m), slightly higher than last year, signalling continued demand in the market.
Meanwhile, the group's Land Based Technology (LBT) segment experienced a slowdown, with revenue dropping to NOK 137 million (EUR 11.26m / USD 12.62m) from NOK 174 million (EUR 14.30m / USD 16.03m) in Q2 2023. EBITDA and EBIT remained negative, though slightly improved compared to the previous year. The order intake also declined sharply to NOK 149 million (EUR 12.25m / USD 13.74m), reflecting the absence of significant new contracts in 2024, partly due to the slow post-smolt market in Norway.
The quarter also saw AKVA Group complete the acquisition of 100% ownership in Observe Technologies, a move expected to enhance the company's digital capabilities and profit margins in the Digital segment. This segment showed modest revenue growth to NOK 35 million (EUR 2.87m / USD 3.23m), but made a loss during the quarter, with an EBIT of NOK -2 million (EUR -0.16m / USD -0.18m).
The Nordic region led revenue growth, increasing from NOK 475 million (EUR 39.04 / USD 43.77) in Q2 2023 to NOK 602 million (EUR 49.47 / USD 55.51) in Q2 2024, driven by high activity in the Sea Based segment. In contrast, revenue in the Americas and the Europe & Middle East (EME) regions saw slight declines, reflecting varying regional market dynamics.
Overall, the AKVA Group maintained a solid financial position, with total assets of NOK 3,820 million (EUR 313.82 / USD 352.40) and an equity ratio of 30.5% at the end of Q2 2024. The company held NOK 292 million (EUR 23.99 / USD 26.92) in cash and unused credit facilities.
Looking ahead, AKVA Group expects strong salmon prices driven by reduced supply, and anticipates a gradual recovery in the post smolt market in Norway through the second half of 2024 and into 2025.
The publicly-listed company, which employs 1,384 people across 11 countries, has set ambitious targets for 2024, aiming for a minimum revenue of NOK 3.6 billion (EUR 297.8m / USD 331.9m) and an EBIT margin of 4-5%.