Record high order book for AKVA group

Fish farming supplier AKVA group had revenues in the second quarter of NOK 940 million (£71.4m), an increase of 4% compared to the NOK 907m made in the same period last year.

EBITDA, which is a measure of operating profit, increased from NOK 3m in Q2 2022 to NOK 86m in Q2 2023.

The company received orders in the quarter of NOK 1.84 billion (Q2 22: 827m) and had a record order book of NOK 2.9bn at the end of June 2023.

Orders included the award of a new post-smolt contract with Cermaq Norway with an estimated contract value of at least €60m.

Still below expectations

“Activity in the first two quarters of 2023 was high and above last year. Overall, order intake was good with the recently awarded RAS contract for Nordic Aqua Partners (€40m) and the post-smolt contract for Cermaq Norway (minimum €60m) being the largest contracts,” stated AKVA.

“Profitability continues to improve compared to previous quarters but is still below expectations.”

Profitability in the sea-based business segment was positively affected by the product mix and the commercial breakthrough of deep-sea farming concepts in the quarter.

Sea-based technology (SBT)

SBT revenues for Q2 2023 ended at NOK 733m (736m). EBITDA and EBIT for the segment in were NOK 82m (40m) and NOK 46m (3m), respectively. The related EBITDA and EBIT margins were 11.2% (5.5%) and 6.3% (0.5%) respectively.

Order intake in Q2 2023 was NOK 690m compared to NOK 704m in Q2 2022.

The order book was worth NOK 817m compared to NOK 902m last year.

The Nordics experienced an increase in turnover from NOK 453m in Q2 2022 to NOK 475m in Q2 2023.

In the Americas region, turnover was NOK 158m, which is a decrease from NOK 179m in the second quarter of last year.

Europe and the Middle East (EME), including Scotland, had a turnover of NOK 100m in Q2 2023, compared to NOK 104m in Q2 2022.

Land-based technology

Revenue from the land-based technology segment for AKVA group in the second quarter was NOK 174m (145m).

EBITDA and EBIT ended at NOK -4m (-41m) and NOK -6m (-45m), respectively.

The related EBITDA and EBIT margins were -2.3% (-28.5%) and -3.7% (-31.2%).

AKVA said its land-based business segment is still affected by a high cost base compared to the current level of activity and by lower profitability in parts of the project portfolio.

“The profit margins in this part of the project portfolio were written down significantly in the second and third quarter of 2022, mainly due to cost growth, and will run with a lower profit margin until the completion of the third quarter of 2023.

Order intake for land-based in Q2 2023 was NOK 1.062bn compared to NOK 96m in Q2 2022.

The order book was worth NOK 1.905bn, compared to NOK 779m last year.

Orders related to land-based technology (LBT) constituted 66% of the total order book for the company at the end of Q2.

Digital

Revenue in the segment was NOK 33m (26m) in Q2 2023. EBITDA and EBIT ended at NOK 8m (5m) and NOK -2m (1m), respectively. The related EBITDA and EBIT margins were 23.8% (17.8%) and -5.3% (2.1%).

Order intake was high at NOK 89m (28m) in the quarter.

Orders and outlook

AKVA had orders worth NOK 2.884bn (1.769bn) at the end of Q2.

The company believes that the order reserve and financial position are still solid and form a good basis for implementing the organic growth strategy.

 “Salmon prices are expected to remain strong driven by reduced supply,” the company stated.

“The implications of the introduction of a new resource tax (Norway’s 25% extra tax on salmon profits) are uncertain. Most likely, this will have a negative impact on the level of activity in the short and medium term, especially in the post-smolt market in Norway.”

AKVA has a target of a minimum of NOK 4bn in turnover and 6-8% EBIT in 2024.