Despite an autumn "where lice issues persisted," Arctic Fish closed 2023 with an all-time high in harvested volumes and revenues.
Arctic Fish reported its Q4 2023 results this week. Although in Q3 it was affected by an escape issue and had a difficult autumn due to lice problems - which, among other things, forced it to an emergency premature harvest -, the company was nevertheless able to ride out the storm, closing the year with an all-time high in harvested volumes and revenues.
"The biological production in the quarter has performed as expected," Stein Ove Tveiten, CEO of Arctic Fish said during the presentation. "We had our difficult Q3 behind us with significant lice challenges, but we feel now that we are over that period and are now having a steady production which has been ongoing in Q4, but also into entering into 2024."
It is precisely towards the year now beginning that owner Mowi was also pointing when, in its Q4 2023 report - also presented this week - it said that after a difficult autumn with sea lice problems, its Icelandic subsidiary is looking towards 2024 to focus on "establishing a streamlined and profitable operation."
In the fourth quarter of 2023, Arctic Fish harvested 2,529 tons, compared to 1,343 tons in the same period last year, a year-on-year increase of 88%. For 2023 as a whole, it harvested a total of 11,878 tons. This is a new milestone for the company, which reached its all-time high in harvested volumes. The previous record, achieved in 2021, was 11,500 tons.
During the presentation, the CEO, Stein Ove Tveiten, also highlighted that as of Q3 last year, all of the company's fish was harvested at its new harvesting facility in Bolungarvík. "This is also a big milestone for us going from having our external harvesting to now have full control of the value chain," he said, adding that the startup had gone as planned and expected.
Designed to meet Arctic Fish's short and long-term needs - with growth possibilities for external service contracts for other fish farmers as well - the Bolungarvík facility accounted for a large part of the company's CapEx investments, which amounted to EUR 5.7 million (USD 6.12 million) in the quarter.
Those historically high volumes brought the Icelandic salmon producer's revenue to EUR 8.9 million (USD 9.55 million) in Q4 2023. Compared to the same period last year, this figure represents an increase of no less than 99%. For its part, revenue for the full year 2023 amounted to EUR 88.9 million (USD 95.44 million), which is an all-time high for the company and 60% higher than in 2022, when it reached EUR 55.5 million (USD 59.58 million).
Furthermore, also as a result of increased volumes, the group achieved a positive operating EBIT of EUR 4.2 million (USD 4.5 million), an increase of 58% compared to the same period in 2022. However, Arctic Fish recognized a positive fair value adjustment of EUR 0.3 million (USD 0.32 million) on biomass in the sea, a decrease of EUR 5.2 million (USD 5.58 million) compared to Q4 last year.
"The lower fair value adjustment in the quarter can largely be attributed to a lower biomass in the sea compared to last year, and a change in harvesting structure as a result of the extraordinary mortality phased in Q3 2023," explained Baldur Smári Einarsson, Arctic Fish new CFO.
The appointment of Baldur Smári Einarsson as CFO was, precisely, another of the Q4 milestones Stein Ove Tveiten commented on during the presentation. At the end of November Arctic Fish announced changes in its management team with the promotion of Einarsson - who had previously served as Financial Controller for the company back in 2019 -, and the arrival of John Gunnar Grindskar, who was appointed Chief Operating Officer for Aquaculture (COO Farming). "That is a new position in the company," Tveiten now explained. "John Gunnar comes from different positions in Norway and brings with him a lot of experience and we are extremely pleased to have him with us in Arctic Fish."
The company also reported that, in Q4, the Iceland Food and Veterinary Authority (MAST) and the Environment Agency of Iceland (UST) announced the license renewal for 7,800 tons (MAB) at Patreks and Tálknafjörður, with publication expected to take place in Q1 2024. In addition, it is processing another license application for 10,100 tons at Ísafjarðardjúp, of which an 8,000-ton license (MAB) for Ísafjarðardjúp, announced by MAST and UST in Q3, is still pending publication. "The delay is due to new requirements from the Icelandic government, requiring a risk assessment for sailing routes. The risk assessment has been performed and expected publication is in Q1 2024," the company explained.
Finally, as for volume forecasts for 2024, the Q3 indications are unchanged, with Arctic Fish maintaining its expectations to harvest 10,100 tons. "We have a volume so 2,000 estimated for Q1, down to 1,200 in Q2, and then 3,300 and 3,600 in Q3 and Q4," said its CEO, Stein Ove Tveiten.
Owned by Mowi since the end of 2022, Arctic Fish is one of Iceland's largest salmon farming companies, operating in the country's Westfjords and holding licenses for 27,100 metric tons of salmon and trout production. Recognized as one of Iceland's leading salmon producers, the company has a sustainable licensing framework, actively operates in four fjords, and has applications for an additional fjord, which could bring total capacity to 31,900 tons in the coming years.
