Aquaculture equipment and technology supplier Akva is cutting 130 full-time jobs, including 70 in Norway and 60 in other countries, with the large majority of those cuts coming from its land-based aquaculture operations.
The group will cut 86 jobs from its land-based division, 42 jobs from its sea-based division, and two jobs from its digital unit.
The move is part of a restructuring to reduce costs with the goal to save NOK 100 million (€9.7 million/$9.5 million) a year.
As part of this program, the company incurred non-recurring costs of NOK 98 million (€9.5 million/$9.3 million) in the third quarter, it said in its latest financial results.
Not acceptable
The group said third quarter financial results in its land-based operations are "below expectations and not acceptable."
The business in Denmark will be gradually scaled down, partly due to the high turnover of employees, and a new organization will be created based from the head office at Klepp outside Stavanger, Norway.
"It gives better access to talent in general, with engineers and people with experience from aquaculture in Stavanger and on Jaeren," said the company.
The company's focus going forward will be on post-smolt salmon operations.
Takes a loss on AquaCon loan
Akva Group is also completely writing down its NOK 28 million (€2.7 million/$2.7 million) loan to the US-based land-based project AquaCon. This comes after Akva Group took the contract with AquaCon out of its order book this spring.
Earlier this month, AquaCon, which was planning to construct a $360 million (€369 million), 10,000 metric-ton land based facility in the town of Federalsburg, Maryland, pulled a key permit application, forcing it to find new location for the project.
"The company will move to a new location and getting approved there takes time," Akva CEO Knut Nesse told IntraFish.
"We fundamentally believe in the project, but to be normally careful in our accounting, we take it to zero," he said of the AquaCon loan.
Headwinds
While previously keen to invest in land-based projects, Akva is now turning its focus to post-smolt projects after facing some headwinds in the sector.
"Nordic Aqua Partners in China is doing very well, then we have some other prospects, but it is clear that there have been more headwinds in this than I thought a few years ago," said Nesse.
"Six to 12 months ago, we changed our focus to bet on post smolt."
Losses
Although Akva's third quarter turnover increased 14 percent to NOK 840 million (€81.8 million/$79.9 million), its earnings before interest and taxes (EBIT) ended at a loss of NOK 59 million (€5.7 million/$5.6 million).
This compares with 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) in restructuring costs.
Akva said its order book is good, and that it provides a basis for organic growth. Salmon prices remain strong, however inflation will continue to negatively affect profitability in the short term.
Additionally, the company said the consequences of the proposed ground rent tax are uncertain, but that it will probably affect it negatively in the short and medium term.
