AKVA group notes reduced investment willingness after long period of low salmon prices

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Land-based segment experienced cancellations and postponement of contracts, but it still has a backlog of EUR 150 million. But the third quarter yielded almost normal operations after a demanding first half.

In a financial statement on the Oslo Stock Exchange, aquaculture equipment manufacturer and supplier AKVA group has posted its Q3 results.

Revenue was EUR 74 million, up from EUR 71.7 million. EBIT decreased from EUR 6 million in 2019 to EUR 5.3 million this quarter.

The order intake in the quarter was EUR 60 million with a backlog of EUR 150 million at the end of September. AKVA group have signed engineering and design contracts for full grow-out facilities in the quarter.

As so often, it was the traditional cage-based technology and feed barges that pulled in the most, both by revenue and profit, for the group in the third quarter. EUR 9.2 million in EBITDA shows how important this segment is to the company.

In the report, AKVA group added that it has decided to conduct a strategic review of AKVA Marine Services. This could mean that the business is considered sold.

“The COVID-19 pandemic has had limited impact on AKVA group in the quarter,” it wrote.

“AKVA group have remained focused on the implemented measures started after the COVID-19 outbreak in March to ensure the health and safety of our employees and customers, to monitor and optimize the overall liquidity in the company, to maintain the security of supply during the crisis and a steady order intake to ensure work for all in AKVA group. In the first half of 2020, the pandemic impacted our Land-Based segment the most with cancellation and postponement of contracts. With regards to the Cage Based segment, the impact was mixed as our portfolio of offerings is more diversified in regards to customer needs,” it added.

“The COVID-19 outbreak is still a challenge for our Land-Based business, but activity has picked up from the second quarter this year,” wrote AKVA group.

Due to the overall uncertainty caused by COVID-19 the company has decided not to pay any dividend in the second half of 2020. The low salmon price causes some uncertainty on the customer’s willingness to invest, it added.

Looking forward, AKVA group said that it maintains focus on full grow out RAS facilities, having signed several engineering and design contracts. The last one, with the Norwegian company Ecofisk with potential delivery contract and equity participation, was announced recently.