Despite record revenues, high inflation rates and one-time cost provisions negatively affected AKVA Group's profitability in Q2 2022. The 9% increase in revenues versus the same period last year, totaling NOK 907 million (€92.54 million) was not enough to offset the sharp rise in costs and, as anticipated in early August, it has finally been confirmed that net profit declined from NOK 16 million (€1.63 million) last year to NOK -41 million (€4.18 million) in this second quarter of 2022.
"Record high revenues with cost related headwinds", is how AKVA Group summarizes its results for Q2 2022. Headwinds that already started to blow in Q4 2021, when the group experienced "somewhat challenging profit margins due to cost inflations and global supply chain restrictions". The war following the Russian invasion of Ukraine only exacerbated the situation resulting in estimated additional costs for the group of NOK 37 million (€3.7 million) in the first half of 2002, which is now coming to an end. According to AKVA's presentation, in total, the profits and loss (P&L) for the second quarter was affected by NOK 102 million (€10.40 million) of extraordinary costs. "The P&L in Q2 22 was significantly impacted by high inflation rates and cost provisions", they conclude.
The company warns that this continued uncertainty related to supply chain constraints and cost inflation may affect profitability for the remainder of 2022. Meanwhile, those who are sure to be affected are its shareholders. "Due to the challenging first half year of 2022 the company has decided not to pay any dividend in the second half of 2022", they announce.
Although aware that global instability and uncertainty may continue to affect profitability in the short term, AKVA Group is confident in the strong demand for salmon and assures that the order book and financial profile remain solid and form a good basis for executing the organic growth strategy. "Based on the underlying demand for salmon the Group believes in strong market growth. To meet the future demand a significant part of the production will come from land-based facilities or other unconventional production methods", they stated. So, the Group expects a potential for exponential growth for the land-based segment and a continued strong market for the sea-based one.
Moreover, the company stresses the importance of digital products within its total product offering. "The company will continue to invest and develop attractive solutions, both within sea-based and land-based technology", they said.
AKVA Group is a technology and service partner to the aquaculture industry worldwide. The company has 1488 employees, offices in 11 countries, and a total turnover of NOK 3.1 billion in 2021. Recognized as a pioneer and technology leader for more than 40 years, they supply everything from single components to complete installations, both for sea farming and land-based aquaculture.
*Cover photo: AKVA Group.
