Marel has revealed the financial impact of Stranda Prolog, after the aquaculture supplier announced that it was entering into insolvency.
Marel and Stranda Prolog had collaborated over several years to deliver own global projects and, in January 2021, Marel acquired a 40 percent stake in the company. “The strategic partnership with Stranda Prolog was based on their superior knowledge of raw material handling and quality processing solutions for primary salmon processing,” Marel said in a statement.
“When Marel acquired the 40 percent stake, Stranda Prolog had 100 employees, €25 million in annual revenues and was positioned for continued growth…However, orders received gradually softened during the pandemic and with the addition of significant cost increases on legacy contracts, and lack of raw materials and labor to complete the projects, resulted in significant impact on profitability and liquidity,” Marel explained.
“This unfortunately has been true for many smaller operators, who despite their innovative niche technology and strong orders have encountered difficulty in navigating the challenging environment in the past years,” Marel added.
“The financial impact from the 40 percent stake in Stranda, is estimated to result in an impairment of EUR 7.0 million in the Q3 2022 financial accounts. There will be no impact on operational performance (EBIT) as the holding in Stranda is categorized as investments in associates, though the impairment will impact net result,” the company announced.
Although Marel was quick to highlight that its “business model has proven to be resilient during times of turbulence,” adding that “Marel has a balanced revenue exposure to global economies and local markets through its global reach, innovative product portfolio and diversified business mix.”
“With pro-forma full-year revenues 2021 of €1.5 billion, Marel is enjoying accelerated orders received and revenue growth of over 20 percent that is well balanced from both a segment and geographical perspective, although profitability has been hampered by supply chain complexity and inflation,” Marel highlighted, looking ahead to its full year results.
“As of today, the insolvency administrator will assume control of the business. The board of Stranda hopes there is a basis and interest for all or parts of the business to be resumed and more clarity is expected in the coming weeks. Marel is a minority shareholder in Stranda, and together with the other shareholders is looking into the possible options available.” Marel stated, giving an insight into the potential future of Stranda Prolog’s operations.