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AKVA warns of Q2 loss as Russia’s war drives up costs

Emergency services deal with the aftermath of a Russian bombardment on a Ukrainian town. The war has caused high inflation rates and supply chain restrictions worldwide, said AKVA, adding NOK 37 million to its costs. Photo: State Emergency Service of Ukraine.
Emergency services deal with the aftermath of a Russian bombardment on a Ukrainian town. The war has caused high inflation rates and supply chain restrictions worldwide, said AKVA, adding NOK 37 million to its costs. Photo: State Emergency Service of Ukraine.

Global aquaculture industry supplier AKVA group today said it expects to make an operating loss of NOK 41 million (£3.45 m) for the second quarter of this year, despite a 9% increase in revenue to NOK 907 m – and cited Russia’s invasion of Ukraine as one of the reasons why.

“Profitability is significantly impacted by increased costs from high inflation rates, warranty and cost provisions,” said AKVA, which is headquartered in Norway and has a branch in Inverness and others in Chile, Denmark, Spain, Greece, Iceland, Canada, Australia, and Turkey.

The company said the main items that had contributed to the operating loss in Q2 were:

  • High inflation rates and supply chain restrictions worldwide driven by the Russia-Ukraine conflict with estimated NOK 37 m in additional costs. Continued uncertainty related to supply chain restrictions and cost inflations may impact the profitability for the rest of 2022.
  • One-time cost provisions of NOK 31 m within the Sea Based segment, primarily related to an ongoing barge project in Canada.
  • One-time warranty and cost provisions of NOK 34 m related to specific Land Based projects.

Further details will be presented in the company’s second quarter presentation on Friday, August 12.