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Commenting on the fourth quarter and year-end reports for Iceland Seafood (IS), CEO Bjarni Ármannsson described 2022 as “a challenging year in every sense of the word.” The group made a net loss for the year 2022, losing €9.9m, compared to its €8.8m profit in 2021, despite sales being up 11% from 2021 to reach €420.8 million in 2022. 

However, buoyant sales were not enough to defend IS against increased costs as well as high volatility in the prices of raw materials. The first half of 2022 was the toughest, which IS attributes to post Covid-19 impacts and geopolitical turmoil which caused major disruptions in various supply chains. Salmon and cod prices also hit record highs during 2022, impacting costs, with limited availability and high pricing of whitefish posing another challenge.

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“As input prices continued to increase, we were constantly pushing through insufficient price increases, once
they came through the system,” said Ármannsson. “This vicious cycle costed us dearly. But Iceland Seafood is in it for the long term. We pride ourselves by being close to the market, and that our customers can rely on our
ability to deliver our products at the quality standards required.”

“Rough period” for UK operations 

IS’s UK operation was hardest hit, reporting losses of €18.2m in 2022. Ármannsson spoke of a “particularly rough period” for its UK business, with the group putting their value-added assets in Grimsby up for sale. Following failure to reach a deal with a potential buyer, IS has decided to retain the business, implementing a management plan which expects a positive cash flow from Q2 2023 onwards, despite a negative PBT of £2.5-3.0m for 2023, mainly due to losses in the first quarter.  Ármannsson said, “We believe we are better off that way. We still intend to participate in consolidation in the industry in the UK, which is badly needed.” 

A “more normal environment” expected in 2023

Towards the close of 2022, IS reported a drop in consumer demand which it attributes to increased energy prices and high inflation, factors which it expects will continue to impact sales in the first quarter of 2023. With historically-high seafood prices, the group foresees that this may also have an impact on mid-and longer-term demand. However, IS expects the second half of the year to improve, with input costs to ease and markets stabilizing. The group will seek to address other challenges such as labour market shortages and efficiency through investments in automation and energy-saving projects, such as implementing renewable energy sources at its Spanish facilities.

“We are now seeing cost of input factors stabilize, and in some cases, decline, so we are now operating in a more normal environment,” said Ármannsson.

About Iceland Seafood International

With a team of over 620 people, Iceland Seafood International is one of the largest exporters of fish products from Iceland. The company is an industry-leading supplier of North Atlantic seafood and a leading service provider in its markets, moreover a key processor of high-quality seafood in the Spanish and UK markets.

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