Record year for Akva

The year ended with a strong fourth quarter, despite being a traditionally poor time of year. Q4 2014 revenues were 305 MNOK (246 MNOK) and EBITDA was 13 MNOK (9 MNOK). The order backlog is the second highest ever.  

"We are proud of completing the best year ever in AKVA group's history. High order backlog and continued high market activity also gives positive expectations for the financial performance in the quarters to come", says CEO of AKVA group ASA Trond Williksen.

Cage Based Technology (CBT)

Q4 is traditionally low season for Nordic. However, revenue and margins are stabilizing on a higher level compared to same period in 2013. Change in product mix is the main explanation for reduced margin compared to previous quarters in 2014. Chile had a good quarter and the positive development in the market continues. However, we continue to monitor the development closely. Canada completed a very good year, despite a slightly slower Q4 due to lower technology deliveries in the quarter. Export activity to emerging markets had lower activity in Q4. No profit or loss from the announced Russian contract is included in 2014. In Q4 UK continued with stable but slightly slower performance than previous quarters. The quarter concludes a very good year for our UK operation. Our Turkey operation has a good quarter and a profitable year.

Software (SW)

Akva group Software AS in Norway continues to deliver stable revenue and good margins and have ended another good year financially. Wise Lausnir ehf in Iceland has had a good second half of 2014. This combined with a slightly slower start of the year, completes a decent full year 2014 financially. Software continues to invest in new product modules. These product modules will strengthen the financial performance of the SW segment further.

Land Based Technology (LBT)

LBT has increased activity and improved performance in 2014 compared to previous years and AKVA group Denmark is profitable in 2014. Despite significant financial improvement over the last years, we are still not satisfied with the overall performance. However, we believe improved organization, controlled cost and cash flow will secure a profitable operation going forward.

Order Backlog

Good market activity has materialized in a good order inflow and as a consequence the order backlog is the second best ever for Akva group. The order inflow in Q4 2014 was 460 MNOK (467 MNOK). The order backlog at the end of Q4 2014 was 504 MNOK (520 MNOK).

Balance sheet

The balance is considered as strong. Working capital in percentage of 12 months rolling revenue is improved YoY from 12% to 10%. We are able to maintain low working capital despite significant activity ramp up in 2014. Cash and unused credit facilities amounted to 144 MNOK at the end of Q4 2014 versus 96 MNOK at the end of Q4 2013. Total assets and total equity amounted to 904 MNOK and 389 MNOK respectively, resulting in an equity ratio of 43% (47%) at the end of Q4 2014.

Outlook

The positive outlook in all main market segments is maintained. The strong demand in the Nordic market is expected to last into the next quarters. The demand is driven by high salmon prices, which is fuelling investments in increased efficiency and sustainable solutions for cage based and land based operations. Strong development is expected in the Chilean market, driven by increased investments by main players to extend and enhance more sustainable operations. We are monitoring the market closely and will adjust our operation according to the development. Our UK and Canadian operations are expected to continue to perform well in the next quarters with a significant order backlog and a large portion of reoccurring business. Land based is expected to have a positive development with a growing prospect mass in several market segments.

Prospects in the salmon industry are growing in particular. Earnings are expected to be more stable going forward. Export sales to emerging markets will continue to fluctuate short term, but represents a large potential over time. Akva will continue our effort to build service and after sales as a key business element in all markets and segments. Introduction of a rental model in the Norwegian market is expected to give positive financial effects going forward.