High salmon prices hit Icelandic supplier’s sales

Seafood supplier Iceland Seafood International (ISI) has reported a positive turnaround during the first six months of this year, but high salmon prices early on in the period have continued to affect sales.

The group, which sold its Grimsby operation more than a year ago, reported revenues totalling €98.2m (£82m) which were only marginally down on the previous period in 2023.

The company also managed to convert a net loss of €15.3m (£12.8m) in H1 2023 to a deficit of just €0.7m this time.

ISI said slower sales of premium products, affected by the economic climate, impacted both volume and margins.

Higher than expected salmon prices at the beginning of the quarter impacted sales volume, presenting challenges similar to those faced last year, as it takes time to pass on cost increases to customers.

The production volumes of Argentinean shrimp were below expectations due to lower quality, while the squid campaign outperformed expectations and last year’s results.

Sales of Ahumados (smoked fish) increased by 8% in value during 1H 2024, while volume remained consistent.

The VA N-Europe division achieved sales of €13.8m (£11.5m), a 3% rise from Q2 last year. Sales for the first half totalled €26.7m (£22m), slightly up from €26.4m in the same period of 2023.

Ægir Páll Friðbertsson, CEO said the first half of 2024 has aligned more closely with what we’ve traditionally seen as normal conditions in the white fish markets.

However, the US ban on Russian fish has driven up prices for cod from the Barents Sea, and its impact on our markets in the coming months remains to be seen.

He continued: ”Salmon prices were high during the first half, leading to losses in our salmon operations, similar to the previous two years.

“On a more positive note, our salmon activity performed significantly better in 1H 2024 than in 1H 2023, and the forecast for a decline in salmon prices by the end of Q2 was accurate. We anticipate stable salmon prices throughout Q3 and the latter part of Q4.”

He added: “The growth of Icelandic salmon farming is another encouraging development. We are exploring selling and marketing Icelandic salmon through our network, and we aim to expand this as salmon farming continues to grow in Iceland.”

But the CEO said the economic landscape remains uncertain and is expected to stay that way.

He said: “High interest rates continue to stall our markets, making normal operations challenging while inflation persists. As a result, demand has decreased due to reduced fish consumption and rising prices in our key markets.”

Ægir Páll Friðbertsson, CEO Iceland Seafood International