Aker BioMarine gets black numbers

The krill company reports revenues of $79 million and adjusted EBITDA of $21 million for the Q4 2022.
Antarctic krill in the water column of the Southern Ocean. Photo: Aker BioMarine.
Antarctic krill in the water column of the Southern Ocean. Photo: Aker BioMarine.

This morning, Aker BioMarine (AKB) presented its results for Q4 2022. The Antarctic krill-harvesting company reported an increase in Q4 revenue, EBITDA, and margin over the same quarter last year, and the same was true for 2022 revenue, EBITDA, and margin compared to 2021. "Both, for the fourth quarter and for the full year, we reported positive net results, and that's an important milestone for Aker Biomarine to finally be in black numbers", Matts Johansen, CEO of Aker BioMarine, said during the presentation.

Still in the red, but about to be black. That's what Matts Johansen told us about Aker BioMarine in his TalentView in April last year. AKB has closed 2022 reaching that important milestone for them. As the company's CEO said in today's presentation, the results have been positive in Q4 as well as in the whole of 2002, and this is even though they have encountered some difficulties.

A good year, but below expectations

As said, in today's presentation, the company reported Q4 2022 revenues of $79 million. This figure is 4% higher than in the same quarter last year. Regarding adjusted EBITDA, the fourth quarter figure was $21 million, versus $7 million in the same period of 2021. As for the offshore production volume, it was 1,960 MT in the quarter and the total volume for the full year was 52,000 MT, which is 19% higher than last year.

"Aker BioMarine delivered 6% revenue growth in 2022 with an adjusted EBITDA margin of 25%, up from 18% in 2021", said the CEO, Matts Johansen. "In the year, we improved our krill harvesting and progressed both our Ingredients and Brands business. To further strengthen our core business and create a more robust company, we have initiated an improvement program, where our goal is to realize annualized effects in excess of 20 million within the next two years", he added.

Good fourth-quarter figures capped off a positive year for the company. However, as Katrine Klaveness, Chief Financial Officer (CFO), pointed out, the figures were under expectations. "Fourth quarter was a decent quarter, marking the end of the year with solid growth in offshore harvesting and aqua revenues, while superba is still behind where we wanted to be", she stated. Revenues were up 4%, but "below our guidance of 8-12%", she pointed out.

Matts Johansen, CEO of Aker BioMarine. Photo: Aker BioMarine.

Ingredients and brands

In addition to being the world's leading supplier of krill, Aker BioMarine consists of two business segments, Ingredients and Brands. The Ingredients segment comprises offshore harvesting and production, logistics operations, and onshore manufacturing and sales of krill products. The Brands segment is the human consumer goods business.

As said, in Q4 offshore production volume was 1,960 MT, but this compares with 3,100 MT same quarter last year. The decrease was mainly due to the delay in the arrival of vessels at the gathering area from the shipyard due to technical problems. "Although offshore production still not reflects the full capacity of the fleet 2022 volume was the highest in the company's history", the report said. Net sales for the Ingredients segment totaled $53 million in the quarter, in line with the same period last year.

When talking about Brands, these net sales were $29.9 million in the quarter, also in line with Q4 2021. The Kori brand – AKB's consumer brand – continues to gain market share in the U.S., especially on Amazon, although private label sales through Lang Pharma Nutrition were slightly lower than in the same quarter last year. Prices increased in most categories in the quarter, offsetting higher inflation rates in the supply chain.

2023, a year of change

On the outlook for next year, the company has recalled that krill harvest volumes in the Antarctic are seasonal, so it is expected that around 70-75% of annual volumes will occur during the first half of the year. The ultimate target is for the harvesting season for its three vessels to exceed 55,000 tons. Regarding sales, the company expects long-term average annual growth to be around 15%. For Q1 2023 the company expects higher sales than in the same period last year for Qurill Aqua, Superba krill oil and Lang (private labels). For Epion (Aker BioMarine's consumer brand company), however, they expect lower sales.

Notably, during the presentation, CEO Matts Johansen said that after many years of growth 2015 to 2020, Aker BioMarine has had a slow-down the last two years so they believe it is natural to look deeper into their way of doing business and see if they can optimize their structures, processes and cost pockets. Since the fall of 2022, the company has been analyzing all of this in detail and identifying a number of initiatives to improve the way they do business and reduce that cost. 2023 will therefore be a year of change for the company.

"After years of strong growth, the slowdown in 2021/22 enabled us to optimize and improve the way we do business", the report points out. Those initiatives have already started to be implemented and they expect them to "together bring $20 million or more than $20 million in cash effects within 24 months", Johansen said. The measures will be implemented in 2023 and the results are expected to be seen in 2023 and the second half in 2024.

About Aker BioMarine

Aker BioMarine is a leading biotech innovator and Antarctic krill-harvesting company developing krill-derived products for consumer health and wellness as well as animal nutrition. It has a strong position in its industry and is the world's leading supplier of krill from the pristine waters of Antarctica. The company also has recently applied for six research permits for salmon farming together with LetSea and Nofima to conduct large-scale trials of krill in combination with new raw material ingredients. Aker BioMarine is listed on Oslo Stock Exchange (AKBM).

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