AKVA Group warns of salmon tax impact

The AKVA group, the world’s largest supplier of aquaculture services and solutions, has warned that the salmon tax is having a negative impact on the level of activity in the sea based business – and on land based operations.

Presenting its results for the third quarter, the company said that the group delivered slightly reduced third quarter revenues of NOK 817 million kroner (£60m) against NOK 840m (£62m) a year ago.

EBITDA, however increased over the year to NOK 78m (£5.7m) compared with NOK 25m (£1.83m) in Q3 2022 while the EBIT was up at NOK 29m (£2.1m) from a deficit of NOK 59m (£4.3m) in Q3 last year.

AKVA said: “The profitability in the Sea Based business segment is acceptable with a healthy product mix, supported by the commercial breakthrough of deep farming concepts.”

The group’s Land Based business was suffering, however, from a high cost base coupled with slow demand in the market.

A “rightsizing” process, targeting NOK 45m (£3.3m) in annual cost savings, will be carried out in Q4 to adapt the organisation to the current and expected activity level.

The company added in a statement: “Due to the change in market conditions AKVA will revise the medium-term financial targets during Q4.

“The activity in the first three quarters of 2023 was somewhat higher compared to last year.”

Meanwhile order intake in Q3 2023 was NOK 574m (£42m) compared to NOK 450m (£33m) in Q3 2022. The order backlog ended at NOK 731m (£53.5m) compared to NOK 672m (£49m) last year. The company noted the award of a RAS contract for Nordic Aqua Partners (at €40m) and the post smolt contract for Cermaq Norway (minimum of €60m) as the largest contracts.

It added: “However, the introduction of the resource tax has a negative impact on the activity level both in land based and parts of the sea based business, and the market outlook is challenging and uncertain. Profitability is continuing to improve compared to last year but is still below expectations.”

While the Nordic region revenues were up by NOK 38m (£2.6m) to NOK 417m (31m) the revenues from Europe, the Middle East and North America were down.

The group said the acquisition of 51% of the shares in the in-cage monitoring system business Submerged AS was completed in during the quarter with the option to increase the ownership to 100% in 2028 based on certain conditions.

Ownership in the net manufacturing and maintenance business Newfoundland Aqua Service Ltd was increased from 70% to 98.5% in last month through the execution of options.