Billion kroner backlog

The Group’s Q4 report, which was published today, shows that the order intake for the final quarter was 561 MNOK (350 MNOK). The order backlog at the end of Q4 2016 was 998 MNOK (649 MNOK), which is the highest order backlog ever for AKVA group.

The Group completed the fourth quarter with record high sales and order intake – with revenues of 449 MNOK (344 MNOK) and an EBITDA of 24 MNOK (27 MNOK).

Cage-based

The cage-based segment in the Nordic region had an increase in revenues of 72% y-o-y. EBITDA was up from 10.3 MNOK in Q4 2015 to 26.9 MNOK in Q4 2016. All entities are contributing well. The Farming Services operations is increasing and strengthening the Group. Increased activity in Chile helped to deliver a positive EBITDA of 1.8 MNOK after several poor quarters. Q4 in Canada was slow as regards to new sales, but the area continues to deliver good margins. Australia remains a small, but profitable operation.

In Scotland the OPEX-based revenue and service sales performed very well and offset a quieter project market. The Turkish operation continued to improve and quarterly financial performance were good. The Group noted increased activity in the sea bass and sea bream industry in the Mediterranean and the outlook for 2017 is positive. Highlights of exports to emerging markets included deliveries to Iran in Q4. Emerging markets are dominated by a few but large contracts and this will continue to give variations in the P&L quarter by quarter.

Land-based technology

The land-based segment, with Aquatec Solutions and Plastsveis, performed very well with good margins. However, restructuring costs and one-off expenses relating to Akva group Denmark reduced the overall EBITDA for the segment by 19.9 MNOK in Q4. The EBITDA was also offset by a 4 MNOK earn-out to former shareholders of Aquatec Solutions. The land-based segment ended the quarter with a strong order backlog, representing 41% of the total backlog for the Group at end of 2016.

Acquisition of Sperre AS

Akva intends the newly-acquired Sperre AS to become the Group’s "center of excellence" in terms of ROV and subsea technologies. AKVA group ASA acquired 66% of the shares in Sperre AS, in deal worth NOK 126.9 million.

Atlantis

In partnership with the companies Sinkaberg-Hansen AS and Egersund Net AS, Akva group ASA established the company Atlantis Subsea Farming AS on February 1st, 2016 with the purpose of developing submersible fish-farming facilities for salmon on an industrial scale.  Atlantis Subsea Farming AS has applied for six development licenses to enable large-scale development and testing of the new technology and operational concept.

On November 26th The Norwegian Directorate of Fisheries informed Atlantis Subsea Farming that the concept for submersible farms fell within the general scope of the scheme for awarding development fish-farming licenses, and that the Directorate will continue on to consider the concept further with an objective to award one or more licenses.  Atlantis Subsea Farming AS has engaged in a process with the Directorate to provide additional information, including target financial criteria for the concept.

Outlook

Akva expects increased activity in UK and Chile in 2017 and a solid recovery compared to 2016. In Canada, they are facing somewhat increased competition in the market and have moderate expectations for the development in 2017. The activity in the Mediterranean represents an upside potential and the Group intends to focus resources on this region over the next quarters.

The Group’s land-based segment is growing and they intend “to be selective and focus on project execution”.

Simon Nyquist Martinsen will take up the position as Group CFO on 23 February.