ISI predicts better times ahead as profits return

The salmon and white fish processor Iceland Seafood International is back in profit, although high salmon prices at the start of the year created problems for the business.

Group sales for the third quarter reached €102m (£85m) , an increase of 6.5% compared to the same period last year.

The normalised pre-tax profit of €1.4m (£1.16) in the quarter marks an improvement of €2.5m over Q3 2023.

The VA (Value Added) S-Europe division reported sales of €47.4m  (£39m) in the third quarter, marking a 6% increase compared to the same period in 2023.

Sales for the year’s first nine months declined by 2.5% in value, however, and by 6% in volume compared to nine months  in 2023.

The division’s normalised pre-tax profit reached €1.1m, an increase of €2.3m over Q3 2023.

Sales of ahumados  (smoked fish)  increased by 6.7% in value during the first nine months of  2024, while volume increased by 3.7%.

The VA N-Europe division reached sales of €13.4m (£11m) , a 6% increase from Q3 last year. Total Sales for the first nine months reached totalled €40.1m, increase from €39m in the same period of 2023.

Higher-than-expected salmon prices in Q1 and part of Q2 impacted margins, presenting challenges similar to those faced last year. The division´s pre-tax profit in Q3 was €0.7m, down from a profit of €0.9m in Q3 2023.

Salmon prices peaked in April this year and have since declined significantly. Based on current forward pricing, prices are expected to remain stable for the rest of the year, which should positively impact its  salmon-based operations.

The S&D division had a positive start to the year, with strong sales from Iceland, and continued to perform well through Q3.

Sales of fresh cod and haddock, along with frozen-at-sea cod and haddock in the UK and US markets, were key drivers of performance. Additionally, signs of recovery in the European market helped support solid sales for IS Iceland.

Ægir Páll Friðbertsson, CEO Iceland Seafood International

CEO Ægir Páll Friðbertsson, CEO said: “The first nine months of 2024 have reassured us that we are on the right track.

“All key indicators are heading in the right direction.  That is a very positive sign for us in a market that has been highly challenging in all aspects for quite a long time now.  High interest rates and inflation, high raw material prices, lesser demand, decreasing fish consumption, political instability, and increasing storage and transport costs.

“Markets in Europe seem to be recovering slowly, and the demand from the US market has increased due to the US ban on Russian fish.  We expect cod prices to remain high in coming years due to a quota reduction in the Barents Sea.

He added: “Salmon prices were high during the year’s first half but came well down in the middle of the year.  We anticipate stable salmon prices throughout the year, with a potential increase towards the end.

“While the economic landscape remains uncertain, there are positive signs emerging. Interest rates, inflation, and food inflation have been easing in our key markets, which is encouraging.

“However, high interest rates are having negative impact on our financial results compared to last year. While markets continue to be sluggish, there are signs of recovery, and we are hopeful that this will lead to increased demand in the coming months.”