Mixed quarter for Akva

"Akva group continues to deliver stable high margins despite the challenges we face in Americas and in Akva group Denmark A/S this quarter. The recent year's transformation of Akva group to become a better performing and more diversified Group is reflected in the Q3 results. Our growth strategy continues with the recent acquisition of Sperre AS, investments in Helgeland Plast AS as well as extension of our activities in the Mediterranean. Operationally and financially Akva group is well positioned for further growth. This is also underlined with the highest order backlog ever at the end of a quarter," says outgoing CEO Trond Williksen.

The group achieved revenues of 354 MNOK (355 MNOK) and an EBITDA of 38 MNOK (41 MNOK). Third quarter EBITDA margin was 10.8% (11.4%).

Cage Based Technology (CBT)

The report states that; "Nordic CBT had a good performance in Q3. A wide range of products continues to contribute to the financial performance. Helgeland Plast AS continues with good performance this year and the Farming Services area with Akva Marine Services AS is also performing well."

The group reports reduced activity in Americas, resulting in a reduction in EBITDA year on year of 8.7 MNOK in Q3, but the report also states: “The Chilean operation is now leaner and well prepared for an upturn in the market when this happens. Canada had another unusually slow quarter. Australia continues to be a small, but profitable operation."

It continues: “UK had a decent quarter and continues to have a high level of OPEX based revenue. Turkey continues with another very good quarter. We are experiencing increased activity in the Sea Bass and Sea Bream industry in the Mediterranean. Export to emerging markets have a relative low, but profitable operation in Q3. Emerging markets are dominated by a few but large contracts and this will continue to give variations in the P&L quarter by quarter.”

Software (SW)

According to the report: “Both Akva group Software AS and Wise lausnir ehf experienced improved performance year on year in Q3.”

Land Based Technology (LBT)

The group reports good financial performance from Aquatec Solutions and Plastsveis, but a weak quarter for Akva group Denmark, where "restructuring has resulted in a negative EBITDA of MNOK 4.9 in Q3". The land-based segment ended the quarter 47% of the total order backlog in the Group, while its revenues rose by 85% year on year, contributing 22% of total revenues in Q3.

From August LBT was carved out as a new group entity, headed by Morten Nielsen, who became a new member of the Group management team, responsible for all land-based operations in AKVA. In addition, Nielsen also holds the roles as General Manager in both Aquatec Solutions and AKVA group Denmark.

Mediterranean expansion

The report comments on: “positive signs in the Sea Bass and Sea Bream market in the Mediterranean”, which has inspired it to establish a new office on the east coast of Spain.

Iranian involvement

Following delivery of the second cage farm to Iran the group is looking to increase sales of both cage based and land based technology into the country – aided by an Iranian Government strategy to grow cage farming of species such as barramundi, sea bream, rainbow trout and sturgeon by 200,000 tonnes in 5 years.

Atlantis

In partnership with Sinkaberg-Hansen and Egersund Net, Akva established Atlantis Subsea Farming AS on February 1st, 2016 with the purpose of developing submersible fish-farming facilities for salmon on an industrial scale. The new firm has applied for six development licenses to enable large-scale development and testing of the new technology and operational concepts but is still waiting for a final resolution.

Outlook

The strong order backlog gives the group a “good mid-term outlook”, especially in the Nordic cage based segment, in the UK, in Europe, Australia, Turkey and in its land based activity.

The group continues “to actively seek strategic M&A opportunities within relevant segments” including “service and after sales”.