AKVA group 1Q 2010 Financial reporting

April 29, 2010 10:05

Operating revenues in 1Q were 158.0 MNOK versus 152.4 MNOK last year. - The EBITDA in 1Q was 0.5 MNOK versus -3.3 MNOK last year. - Order backlog at the end of 1Q2010 was 260 MNOK which is approximately 30% higher than last year. - The order inflow in 1Q was 140% higher than last year, reports www.megafishnet.com with reference to AKVA Group.

In the comments below on the financial accounts, the 2009 figures are presented in parentheses following the 2010 stated values when included. From the change in the group structure that was implemented in the second half last year with a flatter structure, the group does no longer operate according to the split between the two former operational segments OPTECH and INTECH. Operations and profit Operating revenues in 1Q were 158.0 MNOK (152.4) with an EBITDA of 0.5 MNOK (-3.3). The depreciations in 1Q were 7.5 MNOK (7.8) which gave an EBIT - 7.0 MNOK (-11.1). The revenue level is marked by the restrictive investments regime with the Norwegian salmon farmers in 2009 and the corresponding low order inflow in the last quarter of 2009. The order inflow in 1Q suggests a gradual improvement going forward. Net financial items were 2.2 MNOK (1.4). The increase is related to on average higher net interest-bearing debt. Profit before tax in 1Q was -9.2 MNOK (-12.6) and net loss -5.3 MNOK after allowing for taxes of -3.8 MNOK. Balance sheet and cash flow Working capital in the group balance sheet, defined as non-interest bearing current assets less non-interest bearing current liabilities was 105.6 MNOK down from 120.0 MNOK from the beginning of the year and down from 168.2 MNOK from end of 1Q last year. The reduction YTD should be seen in relation to projects but is expected to increase in 2Q. Net interest-bearing debt amounted to 133.9 MNOK at the end of 1Q versus 141.9 MNOK at the beginning of the year. Gross interest bearing debt amounted to 177.4 MNOK versus 198.3 MNOK at the beginning of the year. The reduction is mainly related to the reduction in working capital. Cash and unused credit facilities amounted to 86.0 MNOK. Total assets and total equity amounted to 641.0 MNOK and 250.4 MNOK respectively, resulting in an equity ratio of 39.1%. Investments in the first quarter amounted to 4.4 MNOK whereof 1.7 MNOK is capitalized R&D expenses in accordance with IFRS. A waiver extending through 2Q 2010 relating to the financial covenants of the major credit facilities and loans was agreed with the company's main bank in 4Q. Shareholder issues Earnings per share for 1Q 2010 were -0.31 NOK (-0.51). The calculation is based on 17.222.869 shares average. Market and future outlook In the first quarter of 2010, we saw a normalized and sound development in the markets in the UK and Canada. There are also signs of positive developments in Chile, and an improving situation in a number of other markets. However, the general situation is still dominated by uncertainty. In spite of this uncertainty the Group experienced an improved order inflow and increased order backlog compared to previous quarters. The order backlog was at the end of 1Q 260 MNOK versus 200 MNOK at the end of last quarter last year. During the first quarter AKVA group strengthened its position in the recirculation business with new important contracts for delivery this year and during 2011. The salmon industry is enjoying high salmon prices and good volumes, resulting in correspondingly strong results. This should fund reason for improvement in the market development going forward, however uncertainty is still prevalent. In April AKVA group signed a contract of 54 MNOK for delivery of 3 complete full scale farming sites in Croatia. AKVA group believes there will be an increasing demand for such complete turn-key solutions also in other markets in the future. Furthermore the market interest for recirculation is increasing and it is likely that this will lead to more investments by AKVA's customers going forward. The challenging fish health situation in the Chilean market through the last years now seems to be under control. This is now leading to a gradual improvement of the market activity, however the return of the Chilean market is expected to take years.

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