AKVA group ASA 3Q financial reporting
- Operating revenues in 3Q were 212.3 MNOK versus 139.8 MNOK last year. Year to date operating revenues were 546.6 MNOK versus 456.5 MNOK last year, reports www.megafishnet.com with reference to AKVA Group.
- Operating profit was 10.2 MNOK in 3Q compared to 7.4 MNOK in 3Q last year. Last year's figures were positively affected by one-off items amounting to net 6.7 MNOK.
- Implementation of measures to reduce costs and improve earnings continues.
- The order backlog at the end of 3Q was 270 MNOK versus 203 MNOK at the end of 3Q last year.
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 3Q were 212.3 MNOK (139.8 MNOK) with an EBITA of 10.2 MNOK (7.4 MNOK). Last year's figures were positively affected by one-off items amounting to net 6.7 MNOK related to profit from the sale of Surefish 11.7 MNOK and restructuring provisions of 5.0 MNOK. Margins on projects were negatively affected by higher costs on barge, cage projects and product mix. The group continues to work on reducing the cost base as well as improving precision and quality in the deliveries. Focus will be to strengthen AKVA group's position in the established markets and efforts into Asia will be limited towards more selected projects rather than having presence in many markets.
The depreciations in 3Q were 8.1 MNOK (8.0) resulting in an EBIT of 2.1 MNOK (-0.6). Net financial items were -3.7 MNOK (-3.1). The increase is related to currency loss. Profit before tax in 3Q was -1.7 MNOK (-3.7) and net loss -1.5 MNOK (0.4) after allowing for taxes of -0.1 MNOK.
YTD operating revenues were 546.6 MNOK (456.5) with and EBITDA of -1.2 MNOK (4.5). Depreciations and amortizations amounted to 23.2 MNOK (23.7) resulting in an EBIT of -24.4 MNOK (-19.2). YTD profit before tax was -31.7 MNOK (-26.7) after allowing for net financial items of -7.3 MNOK (-7.5). Net profit for the nine months period was -23.1 MNOK (-17.6).
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 114.6 MNOK down from 120.0 MNOK from the beginning of the year and down from 127.5 MNOK from end of 3Q last year. Focus is maintained on containing the working capital.
Net interest-bearing debt amounted to 156.4 MNOK at the end of 3Q versus 141.9 MNOK at the beginning of the year. Gross interest bearing debt amounted to 206.5 MNOK versus 200.0 MNOK at the beginning of the year. Cash and unused credit facilities amounted to 65.0 MNOK. Total assets and total equity amounted to 669.1 MNOK and 233.0 MNOK respectively, resulting in an equity ratio of 34.8%.
Investments in the first nine months amounted to 14.2 MNOK whereof 5.3 MNOK is capitalized R&D expenses in accordance with IFRS.
A waiver extending through 4Q 2010 relating to the financial covenants of the major credit facilities and loans was agreed with the company's main bank in 2Q.
Earnings per share for 3Q 2010 were -0.09 NOK (0.02). The calculation is based on 17.222.869 shares average.
In August Mr Knut Molaug stepped down from his position as CEO for AKVA group ASA. There is an ongoing search for a new CEO, meanwhile the CFO Morten Nærland is the acting CEO of the group.
Market and future outlook
The order inflow during 3Q was marked by the holiday season in Norway and the UK although with a recovery seen towards the end of the quarter. The Norwegian salmon farming industry is still enjoying sound salmon prices but to balance the equation there are also challenges as to sea lice situation, disease issues and uncertainty related to the general regulatory framework for the industry. The latter might well contain investments.
During 3Q the incipient recovery of the Chilean market became more evident showing a sound order inflow, also going into 4Q. The other markets also seem to be developing fairly well with a scent of a positive sentiment.
In October AKVA group signed a contract with National Prawn Company in the Kingdom of Saudi Arabia for delivery of a pre-grow-out system for production of Yellowtail Kingfish for a value of 21 MNOK. The contract was part of Letter of Intent that was signed in March 2009 and will be delivered during the first half of 2011.
The order backlog was at the end of 3Q 270 MNOK versus 203 MNOK at the end of 3Q last year. Several projects to improve gross margin and reduce the fixed cost base are ongoing, but the full effect will come through in the first half of 2011.
AKVA group ASA
Morten Nærland Acting Chief Executive Officer & Chief Financial Officer
Phone: +47 51 77 85 00
Mobile: +47 91 80 40 32