AKVA sees revenue rising, profits falling for Q3

Aquaculture technology business AKVA has reported revenue up for third quarter of 2022, year on year, but profitability has been “challenging”, the company said.

Revenue for the AKVA Group in Q3 was NOK 840m (£71.2m), up 14% compared with Q3 of 2021. EBITDA was down, however, from NOK 79m (£6.7m) last year to NOK 25m (£2.1m). The company recorded a net financial loss of NOK 93m (£xxx) compared with a net profit of NOK 14m (£1.2m) last year.

The report for Q3 states: “At the end of 2021 AKVA group experienced challenging profit margins due to high cost inflations and global supply chain restrictions. This has been further intensified in 2022 due to the war between Ukraine and Russia. Examples include increased freight rates, high energy prices and increased price level on raw materials and key components in general. The estimated P&L impact from the high cost inflations in the first half year was MNOK 57. Furthermore, the global instability has a negative impact on the net working capital and inventory levels. The increased inventory levels are partly related to higher price levels and partly to secure supplies for our production facilities and products. The situation has normalised somewhat in Q3 2022 but is still considered to be uncertain going forward.”

Sea Based Technology (SBT) revenue for Q3 2022 ended at NOK 681m (NOK 603m). EBITDA and EBIT for the segment in Q3 ended at NOK 79m (NOK 70m) and NOK 44m (NOK 29m), respectively. The related EBITDA and EBIT margins were 11.5% (11.6%) and 6.4% (4.7%), respectively. EBIT was negative impacted from cost accruals related to restructuring and cost savings programs of NOK 11m in the quarter.

Order intake in Q3 2022 was NOK 450m compared to NOK 563m in Q3 2021. Order backlog ended at NOK 672m compared to NOK 808m last year.

The Nordic region experienced an increase in revenue from NOK 338m in Q3 2021 to NOK 381m in Q3 2022.

In the Americas region, the revenue was NOK 186m, which is an increase from NOK 140m in the third quarter last year.

Europe and Middle East (EME) had a revenue of NOK 114m in Q3 2022, compared to the revenue of NOK 125m in the third quarter last year.

Land Based Technology (LBT) revenues for the second quarter were NOK 134m (NOK 115m). EBITDA and EBIT ended at NOK -63m (NOK 7m) and NOK -106m (NOK 4m), respectively. The related EBITDA and EBIT margins were -46.6% (5.7%) and -78.9% (3.4%). EBIT was negative impacted from cost accruals related to restructuring and cost savings programmes of NOK 87m in the quarter.

Order intake in Q3 2022 was NOK 167m compared to NOK 34m in Q3 2021. Order backlog ended at NOK 812m, compared to NOK 867m last year.

The revenue in the segment was NOK 25m (NOK 20m) in Q3 2022. EBITDA and EBIT ended at NOK 9m (NOK 3m) and NOK 3m (0), respectively. The related EBITDA and EBIT margins were 38% (13%) and 11.5% (-1.6%).

Working capital as a percentage of 12 months rolling revenue is 5.9% (12.1%). Cash and unused credit facilities amounted to NOK 793m (NOK 311m) at the end of Q3. Total assets and total equity amounted to NOK 3,477m and NOK 1,181m respectively, resulting in an equity ratio of 34% (30.8%) at the end of Q3 2022.

The company has decided not to pay any dividend in the second half of 2022.

AKVA said the underlying demand for salmon meant the outlook for the market was good in the long term, but factors including global instability and cost inflation, as well as the Norwegian government’s new resource tax, are likely to continue to affect profitability in the short term.