Norcod has now reported its results for both the second quarter (2Q2023) and the half year (1H2023), including an increase in the harvest, an improvement in the company's financials, and the acquisition agreement with Kråkøy Slakteri AS. Despite the good news, there is still an increase in both expenses and revenues that the company is already working to redirect.
The company has had a good performance in both 2Q2023 and half of the year, which finds data on both sides positive, in line with the moment of the company that, financially, is making the necessary adjustments to remain solid. The financial period highlights the 39% increase compared to 2Q2022 due to an increase in the harvest, the agreement for the acquisition of Kråkøy Slakteri AS, and the cycle started at the Labukta site with 2.6 million fish thrown into the sea.
On the other hand, concerning 1H2023, there are also several aspects to note. These include a year-on-year increase of 41%, a lower operating loss, and a notable increase in WFE tons harvested, from 2,990 in 1H2022 to 4,440 in 1H2023.
Certainly, they have successfully adjusted to market conditions. The company mentioned that they have formed valuable partnerships and connections with various European retailers.
Furthermore, Norcod explained in this regard that it has positive expectations about the market. "In the short-term perspective, we know that customers expect to have Norcod back over the next few quarters, as retailers especially want to have Norcod in their stores because of the predictability on the supply side." On the other hand, in a longer-term perspective, it changes. "Significant cuts in Barents Sea cod quotas are expected from 2024 and beyond." A situation that implies bottlenecks on the supply side of Atlantic cod.
The company also clarified that they are looking at foreign markets such as the United States, Japan, and China.
Regarding the insight that can be gleaned from both 2Q2023 and 1H2023 data, Norcod has increased its sales but has also seen its operating expenses increase, resulting in losses in its operations. In addition, its balance sheet shows changes in its assets and liabilities, including an increase in debt due to a loan that is being restructured. However, the company is taking steps to improve its financial situation.
As for the breakdown by each financial period, 2Q2023 had more expenses and revenues. Sales this year reached NOK 39 million (EUR 3.4 million/ USD 3.7 million), which is more than in 2Q2022 with NOK 28 million (EUR 2.4 million/ USD 2.6 million). However, the cost to operate the company increased to NOK 33 million (EUR 2.7 million/ USD 3 million). This resulted in Norcod making a loss from operations, higher than the previous year. The company explains that this was mainly due to increased expenses despite making more money and having a higher value in its natural resources. The company's total loss for the quarter was NOK 52 million (EUR 4.5 million/ USD 4.9 million), compared to NOK 49 million (EUR 4.2 million/ USD 4.6 million) in 2022.
As for the first half of 2023, Norcod also saw an increase, but of all operating data. The company sold products for a total value of NOK 165 million (EUR 14.3 million/ USD 15.5 million), which is more than the previous year, but the expenses to operate the company also increased, reaching NOK 324 million (EUR 28.1 million/ USD 30.4 million), which also far exceeded that of 1H2022. Thus, despite higher revenues and a higher value in its natural resources, the company had an operating loss, albeit better than the previous year. In addition, the total net loss for the period was NOK 95 million (EUR 8.2 million/ USD 8.9 million), which remained at the same level as the previous year.
Norcod is strengthening its financial position and its leadership in cod farming and has gained recognition for quality and transparency, including the Global G.A.P.
In April, Norcod raised NOK 190 million (EUR 16.5 million/ USD 17.8 million) in private investment. In May, they sold assets for NOK 75 million (EUR 6.5 million/ USD 7 million) and improved their financial situation by converting debt to equity. They also secured more liquid funds through a bank loan. In June, they received more credit.
Norcod AS's engages in the commercial sea farming of cod and actively participates in the entire value chain. Norcod's existing fish farms are located in Mid-Norway with ideal conditions for cod. The company is contributing to blue ocean value creation with minimal impact on the environment while supporting local communities. The company lists itself on Oslo's Euronext Growth market.
