Overruns in projects hitting earnings.
AKVA group issued a notice on the Olso Stock Exchange on Friday which included said that the Q4 EBIT for the aquaculture equipment supplier will be in the range of minus EUR 2.5 million to minus EUR 30 million.
“During the finalization of year-end reporting for AKVA’s two subsidiaries in the Land-Based segment in Denmark, it has been uncovered serious breaches of company policies within project follow up and project accounting,” wrote AKVA.
AKVA said it expected additional losses of around EUR 7 million. After this, the expected EBIT for Q4 will be below minus EUR 10 million and for the full year 2019, the expectation is an EBIT of around EUR 6 million.
“The underlying causes of the losses is amongst others due to cost overruns in projects. An external review is about to be started to evaluate and identify gaps in competence, and then strengthen the organization. Further, a review has been conducted to benchmark the order book with regards to margin expectations,” it added.
The company concluded that it expected to assume normal margins in the projects currently in the order book, which includes amongst other larger orders for RAS facilities in Norway and internationally. “The loss in Q4 is significant, still AKVA is in a solid financial position with sound financing, reasonable leverage, solid equity, available cash and strategic long term majority owners,” it wrote.
Full Q4 results will be presented on February 14th.