Technology provider AKVA’s risk appetite has waned for the aquaculture barge business, a segment that its chief executive described as being less profitable for the company.
The group made a one-time cost provision of 31 million NOK ($3.24 million) on its Q2 balance sheet due mainly to an ongoing barge project in Canada.
CEO Knut Nesse said a March 2019 order for six barges from a Canadian salmon farmer has encountered some difficulties, hitting AKVA with unexpected costs.
“What happened there was that over time, regulatory changes were hitting us with extra costs and also we had issues with an unqualified yard and contract management related to that one. So now we have made full cost provisions of 31 million NOK to complete the six barges,” said Nesse on Friday at the official announcement of the group’s earnings in Q2 2022.
“We have decided that we will take less risk. We will have less risk appetite over the barge business going forward, also because generally, it’s less profitable than other technology segments,” he said.
Neese did not mention which Canadian salmon farming company it is building the barges for, but it was around the time frame he mentioned when AKVA inked a deal with Grieg Seafood Newfoundland to supply it with feed systems and locally-built feed barges until 2026.