AKVA issued a stock exchange notice on January 20 in which warned that its preliminary figures for Q4 2019 indicated a loss of between NOK25 million and NOK30m.
But today the company said Q4 losses could actually be NOK100m, reducing full-year EBIT to around NOK60m.
Losses in projects
“During the finalisation of year-end reporting for AKVA’s two subsidiaries in the Land Based segment in Denmark, it has been uncovered serious breaches of company policies within project follow up and project accounting,” said the firm.
“Significant losses in projects have not been reflected in the P&L (profit and loss) before reporting to AKVA’s headquarters, thus overstating the results.
“The consequence when correcting the results is additional losses of around NOK7m. After this the expected EBIT for Q4 is below minus NOK100m and for the full year 2019 the expectation is an EBIT of around NOK60m.”
AKVA, which claims to be the world’s largest aquaculture supplier, added that although the loss in Q4 is significant, it was “in a solid financial position with sound financing, reasonable leverage, solid equity, available cash and strategic long term majority owners”.
It continued: “The underlying causes of the losses is amongst others due to cost overruns in projects.
“An external review is about to be started to evaluate and identify gaps in competence, and then strengthen the organisation.
“Further, a review has been conducted to benchmark the order book with regards to margin expectations. The conclusion is that it is reasonable to assume normal margins in the projects currently in the order book, which includes amongst others larger orders for RAS facilities in Norway and internationally.”
The full fourth quarter results of the Norway-headquartered company will be presented in Oslo next Friday, February 14.