AQUACULTURE equipment supplier AKVA said that its Q4 losses would be ‘significant’, at below minus NOK 100 million (£8.3 million).
Updating the notice it issued to the Oslo stock exchange in January, when it said the preliminary EBIT for Q4 would be in the range of minus NOK 25 to 30 million, the company revealed it had overstated its results.
In a statement today, AKVA said: ‘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.’
‘Significant losses in projects were not 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 NOK 70 million. After this, the expected EBIT for Q4 is below minus NOK 100 million.
AKVA said that for the whole of 2019 it expected an EBIT of around NOK 60 million.
‘The loss in Q4 is significant; still AKVA is in a solid financial position with sound financing, reasonable leverage, solid equity, available cash and strategic long term majority owners,’ the company added.
The underlying cause of the losses was cost overruns in projects and AKVA will launch an external review ‘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 fourth quarter results will be presented in Oslo on February 14.