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Quin-Sea acquisition bolsters Royal Greenland results

Company’s revenue is now back to the levels preceding the sale of the Wilhelmshaven business.

Royal Greenland achieved record earnings in its latest accounting period, driven in part by its recent acquisition of Quin-Sea, as revenues finally returned to the same levels preceding the sale of its Wilhelmshaven business.

The reported financial year for 2015/2016 reflects 15 months of operation as a result of the changed financial year, which will now follow the calendar year going forward.

For the period, Royal Greenland posted a profit from ordinary operating activities (EBIT) of DKK 337 million (€45.3 million/$48.6 million) and a net profit before tax of DKK 335 million (€45 million/$48.3 million). Revenue reached more than DKK 7 billion (€941 million/$1 billion).

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The growth in revenue and profit should be viewed in the light of the extended operating period, but even on a comparable basis it represents a record profit for the group.

On a 12-month basis, the group achieved revenue growth of 14 percent to DKK 5.4 billion (€725.9 million/$778.5 million), which means that Royal Greenland’s revenue is now back to the levels preceding the sale of the Wilhelmshaven business, which at the time represented 40 percent of the group’s total volume.

The 12-month profit before tax is approximately DKK 20 million (€2.7 million/$2.9 million) higher than in the previous financial year, which at the time was also a record high profit for the group.

With the acquisition of Quin-Sea Fisheries Ltd in Newfoundland, the company further strengthened its position in cold water shrimp, while adding a third core activity in the form of snow crab.

As a result, Royal Greenland’s strategic platform, as defined in the strategy 'The North Atlantic Champion,' now comprises cold water shrimp, halibut and snow crab.

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The acquisition of Quin-Sea Fisheries has improved Royal Greenland’s market access to North America for both Canadian and Greenlandic products, the group said.

In the future, North America will be a primary market for Royal Greenland, on a par with Asia, Scandinavia and Europe.

"Our size enables a vertically-integrated approach to all major world markets in our core species, based on long-term and trusting partnerships with both suppliers and customers," said Mikael Thinghuus, CEO of the company.

"This is reflected in Royal Greenland’s vision to be closest to the fish, closest to the customers and closest to the consumers."

The profit for the year after tax amounts to DKK 173 million (€23.3 million/$24.9 million), which according to the company’s dividend policy would normally trigger a dividend payment of DKK 87 million (€11.7 million/$12.5 million) to the owner, corresponding to 50 percent of the profit.

However, as a result of the strong return on strategic investments, a recommendation will be presented for approval by the annual general meeting to issue an ordinary dividend of DKK 100 million (€13.4 million/$14.4 million).

New trawlers in the pipeline

Royal Greenland is also replacing two of its factory trawlers -- Sisimiut and Qaqqatsiaq.

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The two new trawlers, which represent the largest investment in the company’s recent history, will be delivered in 2019.

The outlook for 2017 is a continuation of the company’s positive development over the past six years and a higher 12-month profit is expected in 2017, it said.

As investments will also remain high, net interest-bearing debt is expected to increase during 2017 to around DKK 1.6 billion (€215.1 million/$230.7 million).

The earnings performance is highly dependent on developments in wild populations and associated quotas, particularly those in Greenland and Canada upon which Royal Greenland depends.

Other factors include general developments in the global economy and developments in sales prices of the company’s core products.

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