Aker Seafoods increases cod farming activities – Fishupdate.com

Aker Seafoods increases cod farming activities Published:  19 February, 2008

NORWEGIAN fisheries company Aker Seafoods has increased its involvement in sea ranching and cod farming in the wake of raw material shortages.

Announcing a huge drop in earnings for the fourth quarter of 2007, the company said its results confirm the main trends within the European whitefish industry; the market is strong and further driven by the increasing demand for first class products. On the flip side, access to raw material and at times big variations in harvesting have had their effect and influence Aker Seafoods’ results in the fourth quarter, the company said.

“In this situation, Aker Seafoods has looked to strengthen its position further by, among other things, making acquisitions in all parts of its value chain,” says Aker Seafoods CEO Yngve Myhre. In December 2007, Aker Seafoods entered into an agreement to acquire processing and distribution capacity located in France. In the fourth quarter, the company increased its involvement in sea ranching and farming of cod, and previously in 2007, the group also purchased quotas both in Norway and Spain.

Through this expansion, Aker Seafoods says it will continue to increase its operating revenues from today’s level to about NOK 3 billion in 2008, which represents a growth of close to 30 per cent. Simultaneously, operational improvement efforts continue as planned and the fleet is being optimised to harvest as much of its quotas as possible. The drive towards specialisation of the production plants will also continue.

The increased demand for fish products is reflected in increased prices; a development that is expected to continue. The access to raw material in 2008 will be affected by Iceland’s reduced quotas and reduced volumes of illegal fishing, as a result of the Norwegian and European Governments’ campaign against illegal fishing. The industry has increased its awareness of delivery assurance, and among other things, the industry is actively pursuing the documentation of sustainable fisheries, the company added.

“All of the factors mentioned above, strengthen Aker Seafoods’ position as a leading player in the European white fish industry. With the completed investments, we have achieved an even stronger platform for further growth,” says Myhre.

While the market for seafood is strong, Aker Seafoods – along with the rest of the Norwegian fishing industry – has experienced a decline in both landings and harvesting compared to normal levels for the fourth quarter. This is due to reduced landings by the coastal fishing fleet and the closure of large and important fishing grounds during the period because of the high proportion of small fish.

For the fourth quarter of 2007, Aker Seafoods achieved earnings before interest, tax, depreciation and amortisation (EBITDA) of only NOK 13 million compared with NOK 56 million for the fourth quarter 2006. EBITDA for the full year came to NOK 189 million, which is at the same level as in 2006.

The loss in profit before tax in the quarter came to NOK 54 million, compared to a profit of NOK 67 million for the same quarter the previous year. The result in the fourth quarter is charged with NOK 26 million in one-off costs and depriciations. For the full year, profit before tax came to NOK 28 million compared to NOK 104 million in 2006.

The Board of Directors proposes a dividend from the company of NOK 0.75 per share. This implies a total dividend payment of NOK 36.4 million.

www.fishupdate.com is published by Special Publications. Special Publications also publish FISHupdate magazine, Fish Farmer, the Fish Industry Yearbook, the Scottish Seafood Processors Federation Diary, the Fish Farmer Handbook and a range of wallplanners.