Akva cuts jobs at its land-based aquaculture division over ‘unacceptable’ results

Aquaculture equipment and technology provider Akva is cutting 130 full-time jobs, including 70 in Norway and 60 in other countries, with the vast majority of those cuts coming from its land-based aquaculture operations.

The group will cut 86 jobs from its land division, 42 jobs from its maritime division and two jobs from its digital unit.

The move is part of a cost-cutting restructuring aimed at saving NOK 100 million (€9.7 million/$9.5 million) per year.

As part of the program, the company incurred one-time costs of NOK 98 million (€9.5 million/$9.3 million) in the third quarter, it said in its latest results. financial.

Not acceptable

The group said third-quarter financial results for its land operations were “below expectations and unacceptable”.

Business in Denmark will be gradually reduced, partly due to high employee turnover, and a new organization will be established from Klepp’s head office near Stavanger, Norway.

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“This gives greater access to talent in general, with engineers and people with aquaculture experience in Stavanger and Jaeren,” the company said.

Going forward, the company will focus on post-smolt operations.

Takes a loss on the AquaCon loan

The Akva Group is also completely canceling its NOK 28 million (€2.7 million/$2.7 million) loan to the US land-based project AquaCon. It comes after Akva Group pulled the AquaCon contract from its backlog this spring.

Earlier this month, AquaCon, which planned to build a $360 million (369 million), 10,000 metric ton land facility in the city of Federalsburg, Maryland, withdrew a key permit application, requiring it to find a new location for the project.

“The business is going to move to a new location and getting approved there takes time,” said Akva CEO Knut Nesse. IntraFish.

“We fundamentally believe in the project, but to be normally conservative in our accounting, we take it at zero,” he said of the AquaCon loan.

Headwinds

While previously keen to invest in onshore projects, Akva is now focusing on post-smolt projects after facing headwinds in the sector.

“Nordic Aqua Partners in China is doing very well, so we have other prospects, but clearly there have been more headwinds than I thought a few years ago,” Nesse said.

“Six to 12 months ago we changed our focus to betting on post smolt.”

Losses

Although Akva’s third-quarter revenue increased 14% to NOK 840 million (€81.8 million/$79.9 million), its earnings before interest and tax (EBIT) resulted in a loss of NOK 59 million (€5.7 million/$5.6 million).

This compares to a positive result of NOK 32 million (€3.1 million/$3 million) in the same quarter last year and is due to NOK 98 million (€9.5 million /$9.3 million) of restructuring costs.

Akva said its order book was good and provided a basis for organic growth. Salmon prices remain high, but inflation will continue to negatively affect short-term profitability.

Additionally, the company said the consequences of the proposed property tax are uncertain, but will likely negatively affect it in the short to medium term.

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