AKVA's revenue in Q4 was lower than expected, especially in the land-based sector. Photo: AKVA.

AKVA warns of loss for fourth quarter of 2019

Aquaculture supplier AKVA expects to report a loss for the last quarter of 2019, it said in a market update today after making a preliminary assessment of results.

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“The company’s current estimate is that the EBIT will be in the range of minus NOK 25 million to minus NOK 30 million, and that the EBIT margin will be in the range of -4% to -5%. This implies a full year EBIT of NOK 136m (4.5%) to NOK 141m (4.7%), compared to NOK 130m (5%) in 2018,” stated Norway-based AKVA, which has branches worldwide including Inverness in Scotland and in Canada and Chile.

“The preliminary revenue in the quarter was lower than expected, especially within the Land Based segment, causing reduction in EBIT. The reduction was mainly caused by delays in projects.

Reduced margins

“Other elements that have contributed to a shortfall of EBIT in the fourth quarter are:

  • Guarantee costs related to certain deliveries of feed barges and nets
  • Provisions for bad debt and guarantee cost related to specific projects within the Land Based Segment
  • Reduced margin expectations for a number of projects, specifically within the Nordic Cage Based segment

“The preliminary EBIT for Egersund Net for the full year of 2019 is in absolute terms better than the (proforma) EBIT for 2018. Still, due to guarantee costs and low activity levels, the preliminary EBIT for Egersund Net in the fourth quarter of 2019 is negative, which represents a significant deterioration compared to the EBIT of NOK 20in Q4 2018 (which was exceptionally strong, as Q4 normally is the low season).”

AKVA’s full fourth quarter results will be presented on February 14.